US, Canada reach 'deal', temporarily delay tariffs

WASHINGTON — US President Donald Trump said on Tuesday he was delaying the 50 percent US tariffs on Canadian imports after the two countries reached a last-minute deal less than two hours before the sanctions were to go into effect.

"I have paused the 50 percent 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 on Wednesday, Trump's import taxes would have hit Canadian products ranging from hockey sticks to tongue depressors.

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

They target around 5.5 percent of Canada's exports to the US, 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".

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

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 US alcohol, dairy and motor vehicle exports. Canada did not immediately confirm those commitments.

Important work remains

Canadian Prime Minister Mark Carney said in a statement that "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.

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.

"There are billions in goods per year that were not impacted before, but now are at risk of being impacted significantly … Businesses have been doing a high-wire act for well over a year, holding off on hiring, investment and growing in Canada," she said.

"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 made tariffs the centerpiece of his economic agenda in his second term. Last year, he imposed double-digit import taxes on almost every country.

The US administration has hit Canadian goods with tariffs — in a push to bring manufacturing back to the US — and has made comments about turning Canada into the US' 51st state.

With the US Supreme Court striking down many 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 United States-Mexico-Canada Agreement.

AGENCIES VIA XINHUA