US President Donald Trump has postponed the implementation of a planned 50% tariff on Canadian imports for three days, easing fears of an immediate escalation in the trade dispute.

Trump announced the decision on social media, saying the tariffs were paused because the United States and Canada had reached a deal, subject to finalising the required documents.

The tariffs were scheduled to take effect on Wednesday. The temporary suspension gives both sides additional time to complete negotiations and finalise the agreement.

Last-Minute Trade Deal

Trump said the 50% tariffs had been due to come into effect at midnight. The proposed measures were expected to affect around $20 billion worth of Canadian goods, including products such as wine, hockey equipment and other consumer goods.

Canadian Prime Minister Mark Carney has acknowledged substantial progress in discussions with Washington but indicated that further work is still needed before the agreement can be finalised.

What Happens Next?

The three-day pause could prove crucial for both governments as negotiators work to settle remaining differences.

The latest development has temporarily reduced pressure on businesses on both sides of the border, but uncertainty remains because the broader trade agreement has not yet been fully completed.

Trump has also raised the possibility of reviving the Keystone XL pipeline project, adding another potential element to the evolving US-Canada negotiations.