Trump postpones 50% tariff he threatened for some Canadian goods

Trump Hits Pause on Threatened 50% Canadian Tariff

Qwenews.com – Hours before the duties were set to activate at 12:01 a.m. ET, President Donald Trump announced a temporary halt to his proposed 50% levy on a broad swath of Canadian imports, shielding approximately $20 billion in goods from the penalty. The reprieve lasts three days.

“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!”

The post, published late Tuesday on Truth Social, also invoked the Keystone XL pipeline, which Trump suggested “may be awoken from the grave!” — though he offered no specifics on what that revival would entail.

Negotiations Behind the Pause

The three-day delay followed several days of high-level contact between the two governments. Canadian Prime Minister Mark Carney spoke with Trump on both Monday and Tuesday while talks continued. Carney characterized the exchanges with the Trump administration as “very delicate and intense.”

In a late-Tuesday statement, Carney confirmed the tariffs would be held until the close of business on August 21.

“Substantial progress has been made, although there is important work still to be done.”

The Legal Mechanism: Section 338

Trump had intended to invoke a little-known statute dating to the 1930s — Section 338 — which had never before been deployed to impose tariffs of this kind. Legal challenges to the administration’s use of the provision were anticipated. Still, absent a court ruling, the president could apply it freely, much as he had done with the sweeping duties the Supreme Court struck down earlier this year.

A critical distinction sets Section 338 apart from other statutes Trump has turned to since that Supreme Court decision: the provision appears to carry no built-in expiration date. Had the duties gone live, they could have persisted indefinitely unless Trump or a successor chose to rescind them.

Scope and Targeting

The proposed tariffs would have spanned dairy products, alcoholic beverages, furniture, industrial equipment, plastics, clothing, and other manufactured goods — collectively representing roughly 5% of the total value of U.S. imports from Canada in the prior year. Trump singled out Canada by alleging it erected barriers against American exports of dairy, automobiles, and alcohol. Canada was also the sole nation besides China that retaliated against Trump’s earlier tariff actions, although Carney subsequently rolled back most of those countermeasures.

Notably, the proposed duties contained no carve-out for goods qualifying under the US-Mexico-Canada Agreement. Products that would ordinarily receive preferential treatment under the North American trade pact could nonetheless have been swept into the levy.

Reactions and Broader Stakes

Carney had called the tariffs a “direct violation” of the trade pact earlier in the year and warned in July that the dispute had “raised costs for families, particularly in the U.S.”

The U.S. Chamber of Commerce issued its own caution on Tuesday, warning that higher tariffs “would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on trade” under the US-Canada-Mexico framework.

Analysts suggest the tariffs may have functioned primarily as leverage in ongoing negotiations. Canada’s economy, already strained by earlier rounds of duties, had been actively engaging with Washington to resolve the broader trade dispute. With the USMCA itself slated for review, Trump held an additional point of pressure over the talks.