Trump says US and Canada have reached last-minute deal to delay 50% US
tariffs on Canadian imports
[August 19, 2026] By
PAUL WISEMAN and ROB GILLIES
WASHINGTON (AP) — President Donald Trump said Tuesday he was delaying
the 50% U.S. tariffs on $20 billion worth of Canadian imports after the
two countries reached a last-minute deal less than two hours before the
sanctions were to go into effect.
The announcement, which Trump made on his social media platform, buys
time for more negotiations and avoids, for now, another strain in
already tense relations between the historic allies.
“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!” Trump posted on Truth Social.
If they had gone into effect as scheduled at 12:01 a.m. Wednesday,
Trump’s import taxes would have hit Canadian products ranging from
hockey sticks to tongue depressors.
But the political impact would likely have been bigger than the economic
one. Canada had threatened to retaliate against any new tariffs with
levies of its own, aggravating a trade fight between countries that sold
each other $880 billion worth of goods and services last year.
A White House proclamation said Canada had expressed a commitment to
remove measures the Trump administration considers discriminatory
against U.S. alcohol, dairy and motor vehicle exports. Canada did not
immediately confirm those commitments.
Canadian Prime Minister Mark Carney said in a statement “substantial
progress” had been made but that important work remained, confirming
Canada had agreed to the three-day delay while negotiations continued.
Carney and Trump had spoken twice by phone in the past two days about
the ongoing negotiations, including a call Tuesday afternoon, Carney’s
office said, underscoring the last-minute push for a deal.
Both countries had reason to step back from the brink. Nearly 72% of
Canada’s goods exports last year went to the United States. And the
Trump administration would be taking a risk by imposing a hefty new
tariff — paid by U.S. importers who try to pass along the cost to
consumers via higher prices — ahead of November’s midterm elections.
U.S. voters are already frustrated with the high cost of living.
“I don’t think either side really wants these tariffs to come into
effect,’’ Ryan Majerus, a partner at King & Spalding and a former U.S.
trade official, said before the delay was announced. “There’s a pretty
strong push on both sides to find an off-ramp here.’’
[to top of second column] |
 Canadian Chamber of Commerce
President and CEO Candace Laing said in a statement that the
three-day tariff delay offered businesses some relief but fell short
of the certainty a signed interim agreement would provide.
“This limbo state is not anyone’s preferred outcome,” she said,
urging negotiators to reach a deal quickly.
Trump’s approach to dealing with Canada marks an
extraordinary departure from the traditionally cooperative
relationship between the two countries. Trump has hit Canadian goods
with tariffs — in a push to bring manufacturing back to the U.S. —
and has repeatedly made inflammatory comments about turning Canada
into America’s 51st state.
Trump has made tariffs the centerpiece of his second-term economic
agenda. Last year, he imposed double-digit import taxes on almost
every country, justifying them by declaring the longstanding U.S.
trade deficit a national emergency. The Supreme Court in February
ruled that he’d overstepped his authority, striking down those
tariffs and setting the stage for the federal government to pay
refunds to importers.
So Trump has looked for other legal authority to impose tariffs.
To hit Canada, he reached back to the Great Depression, invoking
Section 338 of the Tariff Act of 1930 to threaten 50% tariffs on
products that account for about 5% of Canadian exports to the United
States.
Nearly a century ago, with the U.S. and world economies in collapse,
Congress passed the 1930 tariff law, imposing taxes on imports from
around the world. Known as the Smoot-Hawley tariffs, named for their
congressional sponsors, they are notorious among economists and
historians for limiting world commerce and making the Great
Depression worse.
Section 338 tariffs have never been used before.
Section 338 authorizes the president to impose tariffs of up to 50%
on imports from countries that have discriminated against U.S.
businesses. No investigation is required to justify the levies. Nor
is there any limit on how long the tariffs can stay in place.
The U.S. is renegotiating a North American trade pact — the
US-Mexico-Canada Agreement — that Trump strong-armed America’s
neighbors into accepting in his first term. The threat of Section
338 tariffs gives the United States leverage to seek fresh
concessions from Ottawa.
___
Gillies reported from Toronto.
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