US President Donald Trump has temporarily paused the planned 50 per cent tariff on Canadian imports for three days following talks with Canadian Prime Minister Mark Carney, as the two countries work towards a potential trade agreement.

Trump announced the pause on Tuesday in a post on Truth Social, saying it was conditional on the United States and Canada finalising a trade deal. He did not provide details about the discussions with Carney or specify what terms would have to be met for the tariff suspension to continue.

The tariff was scheduled to take effect at midnight and would have affected around $20 billion worth of Canadian imports, including hockey sticks, building materials, liquor and clothing.

Trump-Carney Talks

The temporary pause came after weeks of negotiations between Washington and Ottawa and at least two telephone conversations between Trump and Carney.

According to the Canadian Prime Minister's Office, the two leaders spoke by telephone on Monday and Tuesday. Carney had described the discussions with the Trump administration on Monday as “very delicate and intense”, indicating the sensitivity surrounding the trade negotiations.

The latest pause gives both sides a short window to attempt to reach an agreement before the proposed tariff could be reinstated.

50% Tariff on Canada

Trump imposed the 50 per cent tariff on Canada last month, citing what he described as “unequal treatment” of American cars, dairy products and alcohol.

The additional duty came on top of existing US tariffs affecting several major Canadian exports. These included tariffs ranging from 15 per cent to 50 per cent on Canadian steel, aluminium and copper, a 10 per cent tariff on softwood lumber, and a 25 per cent tariff on Canadian automobiles and auto parts.

The combined measures have increased pressure on Canadian exporters and added to uncertainty over the future of US-Canada trade relations.

Trade Deal Remains Uncertain

Trump's latest decision does not amount to a permanent withdrawal of the tariff. Instead, the three-day pause is tied directly to efforts to finalise a new trade arrangement between the two countries.

Neither Washington nor Ottawa has publicly disclosed the specific terms currently under discussion.

The short deadline could increase pressure on negotiators to resolve outstanding differences quickly, particularly on issues involving market access and tariffs on key Canadian exports.

Trump’s Tariff Strategy

Tariffs have remained a central part of Trump's economic and foreign policy approach during his second term. The administration has repeatedly used import duties as a tool to pressure trading partners into making concessions.

Relations with Canada have been particularly strained. Trump previously criticised the existing North American trade framework and refused to extend the US-Mexico-Canada free trade agreement in its previous form, meaning the agreement would face more frequent reviews.

Trump has also made controversial statements about Canada, including proposals to turn the country into the 51st US state, adding another layer of tension to bilateral relations.

What Happens Next?

The three-day suspension now gives US and Canadian officials limited time to reach a broader trade agreement.

If negotiations produce an agreement acceptable to Washington, the tariff could remain suspended. If the two sides fail to reach a deal, the proposed 50 per cent duty could return after the pause expires.

For businesses on both sides of the border, the immediate focus will be on the outcome of the negotiations and whether the temporary pause develops into a longer-term resolution of the trade dispute.