The three-day pause on Canadian tariffs brings Ottawa and Washington a window to finish paperwork on a deal neither government has detailed. Riding on those three days are up to $28 billion in exports, a 96-year-old law never before used to impose tariffs, and a dairy-and-auto standoff that has dragged on for weeks.
“A 50% tariff essentially makes a product uneconomic to sell into a particular market,” said Dan Kelly, president of the Canadian Federation of Independent Business.
Read: Trump Suspends Canadian Tariffs Hours Before Midnight Deadline
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The Office of the US Trade Representative put the tariffs’ reach at $20 billion in Canadian goods; other counts ran as high as $28 billion, a small slice of the $382 billion Canada shipped to the US last year. Kelly said members among the group’s 103,000 businesses feared the duties could halt their US sales entirely, with some American buyers already delaying orders in anticipation.
Read: Auto Tariffs Are the Last Sticking Point Before Canada’s Trade Deadline
For individual exporters, the numbers translated into concrete contingency plans. A Brockville, Ontario cable manufacturer that ships half its production south of the border faced the same uneconomical math, and a Calgary jewelry maker had already suspended US shipping on her website and Etsy shop and started marking up a large share of her inventory by 50%.
British Columbia, Ontario, and Quebec faced the steepest exposure among the provinces, since those three still bar US alcohol sales in retaliation for tariffs imposed last year, making them the administration’s clearest targets.
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Related: Ford Softens Stance on Ontario’s Ban on American Alcohol
The tariffs stem from proclamations Trump signed last month under Section 338 of the 1930 Tariff Act, a Depression-era law never previously invoked in its 96-year history; the proclamations carved out energy, potash, and critical minerals from the levies.
Legal challenges to the tariffs seemed all but inevitable even ahead of Tuesday’s pause, meaning whatever agreement the two sides finalize could still face a fight over the legal authority behind it.
Canada wanted relief from those levies plus the standing tariffs already hitting its steel, aluminum, auto, and lumber exports; in exchange, Washington wanted Canadian dairy markets opened further to US producers and an end to the retaliatory tariffs Ottawa had layered on after earlier trade fights.
The dispute also unfolded amid broader uncertainty about the two countries’ trade relationship — Washington confirmed last month that it wouldn’t automatically renew CUSMA, kicking off a round of reviews whose outcome remains unclear, regardless of how this week’s tariff fight ends.
Trade Minister Dominic LeBlanc and chief negotiator Janice Charette met repeatedly in Washington with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick in the final days. At the same time, Prime Minister Mark Carney and Trump spoke by phone on both Monday and Tuesday. Carney had called the talks “delicate” and “intense” as the deadline approached, and said he was prepared to respond whatever the outcome.
Carney confirmed the postponement in his own statement Wednesday, though he stopped short of calling the deal done.
“Substantial progress has been made, although there is important work still to be done,” he said, striking a more cautious tone than Trump had the night before.
The tariffs are paused until the end of the day on Friday, August 21. For industries like steel and aluminum, already facing 50% duties for more than a year, a new deadline is nothing new.
