A last-minute deal between the United States and Canada late Tuesday averted the imposition of new 50 percent tariffs on beer, cheese and some other Canadian products.
The tariffs, announced by President Donald Trump last month and that were due to take effect at 12:01 a.m. Wednesday, would have escalated tensions between the U.S. and its northern neighbor, a key trading partner.
Less than two hours before they would have taken effect, Trump posted on his Truth Social account that he was pausing the levies for three days while a deal was finalized. He did not provide details of the deal but referenced a controversial pipeline project.
“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” he wrote.
Tensions between the two nations had been high since Trump last year began implementing widespread tariffs on countries around the globe. Those tariffs have since been overturned by the U.S. Supreme Court, but Trump has turned to an array of legal authorities to impose new levies.
Last month, after wildfires in Ontario sent thick smoke pouring into the United States, Trump threatened to punish Canada with new tariffs. A day later, Trump announced the new 50 percent levies; the White House said they had nothing to do with smoke and instead were intended to punish Canada for retaliating against Trump’s tariffs in 2025, when officials in most Canadian provinces removed U.S. wine and spirits from government-run stores.
Canada also imposed a 25 percent tariff on some U.S. autos in response to a similar move by Trump. The Trump administration says these actions unjustly penalized three industries — alcohol, autos and dairy — which were the targets of the proposed 50 percent tariffs. Canada also imposed a 25 percent tariff on some U.S. autos in response to a similar move by Trump. Last month, the Trump administration said Canada’s retaliation amounted to unwarranted “discrimination” against U.S. merchandise and
The new tariffs would have applied to just 5 percent of the $382 billion worth of Canadian goods that the U.S. imported last year. Economists said they were unlikely to have significantly affected U.S. consumers, but could have sparked a devastating trade war between two key economic partners.
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