San Francisco Frontiers - Trump pauses planned 50% tariffs on Canadian goods for three days

The temporary reprieve from Trump's 50-percent duties would last three days, the US leader said in a social media post.

This was "based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!" Trump wrote on his Truth Social platform.

Trump's announcement came after he held urgent talks with Canadian Prime Minister Mark Carney on Tuesday, hours before the planned tariffs were set to take effect past midnight.

Without going into details, Trump added in his Truth Social post: "The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!"

Trump has previously called for the revival of the controversial project opposed by environmental activists, which was blocked under his predecessor Joe Biden.

Trump signed orders for the steep 50-percent duties last month, with the White House alleging "discriminatory treatment" by Canada against US alcohol, automobile and dairy products.

The tariffs cover products such as wine, hockey sticks and cement.

Carney spoke by phone with Trump on Tuesday afternoon about the trade negotiations, the prime minister's office said.

The leaders also spoke Monday, after Carney told reporters that discussions to avert the duties were at an "intense and delicate" stage.

Trump's planned tariffs target around 5.5 percent of Canada's exports to the United States, worth about $20 billion, Oxford Economics estimates.

While this only poses a "modest" negative risk to Canada's economy, Oxford Economics said in a recent report that the duties would "affect central Canada's manufacturing sector much more severely."

Canadian negotiators have been in Washington to push for a deal to avoid the new tariffs and also secure relief on Trump's sector-specific duties -- which have battered Canada's auto, steel, lumber and aluminum industries.

Ottawa has reportedly offered concessions like pressuring provinces to put US alcohol and wine back on their shelves, Canadian media said.

- Political concerns -

"It's not unusual for a trade negotiation to go right up to the deadline," former US commerce official Christopher Padilla told AFP.

He expects that the Trump administration threatened new tariffs to try and win early concessions from Canada as the countries negotiate over renewing the US-Mexico-Canada free trade agreement (USMCA).

Padilla warned that Trump also has "a history of lashing out against allies when he is frustrated on other fronts," such as when he is not getting what he wants from parties like Iran, China or Russia.

Oxford Economics anticipates that manufacturers who stand to be most impacted include those in the cement, paper, printing, wood, clothing and electronic equipment sectors.

With the US Supreme Court striking down many of Trump's global tariffs earlier this year, the president had tapped an untested legal provision for the new duties targeting Canada.

The US duties will not apply to Canadian energy, potash or goods already facing sector-specific tariffs, but are set to hit products covered by the USMCA.

Trump's trade envoy Jamieson Greer said the tariffs aimed to "hold Canada accountable" for its retaliation against the United States.

Provinces have taken US alcohol products off their shelves, he said, and "given better market access to dairy products from the European Union" among other actions, Greer said in July.

J.Peterson--SFF