On May 6, 2025, U.S. President Donald Trump welcomes Canadian Prime Minister Mark Carney as he arrives at the West Wing of the White House in Washington, DC.
Alex Wong | Getty Images News | Getty Images
Less than two hours before the U.S. imposed major tariffs on certain Canadian products, President Donald Trump announced a tentative agreement to avoid new tariffs.
The postponement could be just a short-lived respite for businesses warning that the planned 50% tariffs on imports of wine, hockey sticks and a range of other Canadian products are already hitting hard.
The new import taxes on about $20 billion worth of goods were announced last month in response to what the Trump administration called Canada’s trade discrimination against key U.S. industries.
The tariffs were scheduled to go into effect at 12:01 a.m. ET on Wednesday. However, at 10:15 p.m. Tuesday, President Trump announced on Truth Social that he would suspend tariffs for three days “based on the fact that Canada and the United States have a DEAL, subject to finalization of the text.”
President Trump’s statement about the deal to be finalized contained few details. However, he indicated that a deal with Canada could include restarting the Keystone XL oil pipeline project from Alberta to Nebraska, which was planned for 2021 by then-President Joe Biden.
“The great Keystone XL pipeline, killed by Sleepy Joe Biden long ago, may rise from the grave!” Trump wrote in the post.
In a subsequent post, President Trump shared an AI-generated image of a pipeline labeled “KEYSTONE” being pulled out of the ground.
Canadian Prime Minister Mark Carney took a more cautious stance in a statement Tuesday night.
“While significant work remains, significant progress has been made,” Governor Carney said in a statement.
In a separate post Wednesday at noon, Carney said the two countries are “moving toward an agreement that strengthens Canada’s advantages, including securing the best terms in each of Canada’s most important strategic areas and providing greater certainty about our future trade relationship.”
Asked on Wednesday morning about the upcoming deal, President Trump claimed Canada had made several concessions, including lowering retaliatory tariffs on U.S. goods.
After a “very good conversation” with Secretary Carney, President Trump told reporters while touring a construction project on the White House grounds, “we have reached an agreement with Canada.”
“They called yesterday and gave us the points we needed,” Trump said, calling it a “very fair deal for both sides.”
President Trump did not mention Keystone XL. But he declined to say which tariffs he was referring to, saying Canadian tariffs “don’t exist for our farmers.” President Trump’s 50% tariff proposal is based in part on allegations of Canadian discrimination against the U.S. dairy industry.
“We are doing certain things,” Trump said when asked if the U.S. would reduce tariffs on Canadian cars as part of the deal, a top goal of trade negotiators in Ottawa.
“We have to give something,” he added. “They were paying high prices and we’re bringing it down a little bit. That’s good for everyone.”
“Basically, Canada doesn’t have any more tariffs. Canada was imposing huge tariffs on us. We don’t have any more tariffs,” he said.
However, the president said the agreement was “subject to finalization of the text.”
The comments came after a presidential proclamation released Tuesday night suggested Canada would lower or eliminate trade barriers to the United States as part of the deal.
“According to senior government officials, Canada has demonstrated its commitment to eliminating the discrimination and unreasonable and unequal impositions that spurred the threat of 50 per cent tariffs,” the statement said.
The same night, U.S. Trade Representative Jamison Greer wrote in the X-Post that the agreement includes “comprehensive market access for all U.S. products, economic security commitments, digital trade alignment, and many important provisions that continue to protect our markets and American workers, along with our Canadian partners.”
After speaking again with Canada-U.S. Trade Minister Dominic LeBlanc in Washington on Wednesday morning, Greer said the Trump administration is “confident that we have reached an agreement” that protects American workers and “strengthens the North American economy.”
“Certainly I think we’ve been able to eliminate some of the irritants that we’ve had over the past year,” Greer said.
—CNBC’s Ashlee Trujillo contributed to this report.
