WASHINGTON — U.S. President Donald Trump announced Tuesday that he is delaying the implementation of 50% tariffs on approximately $20 billion worth of Canadian imports after the United States and Canada reached a last-minute understanding just hours before the new measures were scheduled to take effect.

Trump said the tariffs, which were due to begin at 12:01 a.m. Wednesday, will be paused for three days while both countries finalize the details of the agreement.

“I have paused the 50% Tariffs against Canada,” Trump said in a post on Truth Social, adding that the decision was based on the fact that the two countries had reached a deal “subject to the finalization of documents.”

The temporary pause prevents an immediate escalation between two of the world's closest trading partners and opens a new window for negotiations.

Canada confirms progress but says negotiations continue

Canadian Prime Minister Mark Carney said that “substantial progress” had been made in the talks but acknowledged that important issues remained unresolved.

Carney and Trump spoke twice by telephone over the previous two days, including a conversation Tuesday afternoon, as officials from both countries worked to reach an agreement before the tariffs took effect.

The White House said Canada had committed to removing measures that the Trump administration considers discriminatory against U.S. exports of alcohol, dairy products and motor vehicles. Canadian officials had not immediately confirmed all of those commitments.

The dispute comes at a sensitive moment for the North American economy. Nearly 72% of Canada's goods exports went to the United States last year, making the U.S. market critical for Canadian manufacturers, producers and exporters.

Tariffs could also affect U.S. consumers

The proposed 50% tariffs would apply to a range of Canadian products imported into the United States, potentially increasing costs for American companies that rely on Canadian goods and materials.

U.S. importers are responsible for paying tariffs to the government, although businesses can pass some or all of those additional costs on to consumers through higher prices.

The economic consequences could therefore extend beyond Canadian exporters, particularly at a time when American consumers remain concerned about the cost of living.

The political stakes are also significant, with U.S. midterm elections approaching in November.

Trade tensions between longtime allies

The latest dispute represents a sharp change in the traditionally close economic relationship between the United States and Canada.

Trump has made tariffs a central component of his second-term economic strategy, arguing that import taxes can encourage companies to manufacture more goods in the United States.

At the same time, his administration's trade policies have generated tensions with several major U.S. trading partners.

Canada has previously threatened retaliatory tariffs against U.S. products if Washington imposed additional measures, raising concerns about a broader trade confrontation between the two countries.

For now, the three-day pause provides negotiators with additional time to finalize an agreement and prevent the 50% tariffs from taking effect.

However, until the documents are completed and the commitments are formally confirmed by both governments, the possibility of renewed tariff measures remains.