Trump Claims Deal to Avert Canada Tariffs, Keystone XL Revival Hinted

Just before significant U.S. tariffs on certain Canadian products were set to take effect, President Donald Trump announced a preliminary agreement to prevent the new duties. This development offers a temporary reprieve for businesses already feeling the impact of the threatened 50% tariffs on items like wine and hockey sticks.

The proposed import taxes, affecting approximately $20 billion worth of goods, were introduced last month by the Trump administration, citing perceived Canadian trade discrimination against key U.S. industries. The tariffs were scheduled to begin at 12:01 a.m. ET on Wednesday.

However, late Tuesday evening, Trump declared on Truth Social that he would be pausing the tariffs for three days, stating that Canada and the U.S. have reached a DEAL, pending finalization of documents. While specific details of the agreement were not provided, Trump suggested that the deal might include the resumption of the Keystone XL oil pipeline project, which was canceled in 2021 by then-President Joe Biden. Trump indicated the pipeline, which was planned to run from Alberta to Nebraska, could be "awoken from the grave." He later shared an AI-generated image depicting himself reviving the pipeline.

Canadian Prime Minister Mark Carney's initial statement on Tuesday night was more cautious, acknowledging "substantial progress" but noting that "important work still needs to be done." He later tweeted on Wednesday that both sides are "moving towards an agreement that reinforces that Canadian advantage, including by securing the best terms in each of Canada's most important strategic sectors and providing greater certainty about our future trading relationship."

During a tour of construction projects on Wednesday, Trump told reporters that Canada had made concessions, including reducing its retaliatory tariffs on U.S. goods. He described the conversation with Carney as "very good" and called the deal "very fair for both." Trump claimed that Canadian tariffs "will be non-existent for our farmers," although he did not specify which duties would be affected. He also indicated that the U.S. would be making some adjustments, stating, "We've got to give something. They were paying a high number, we're reducing it a little bit, it's good for everybody." He asserted, "Basically, we have no tariffs going into Canada anymore. Canada was charging us tremendous tariffs. We no longer have any tariffs." He reiterated that the agreement is still "subject to the finalization of documents."

A presidential proclamation released Tuesday night supports the notion that Canada has committed to lowering or removing trade barriers on U.S. goods as part of the agreement. Senior executive branch officials indicated that Canada has expressed a commitment to address "discriminations or unreasonable and unequal impositions" that led to the tariff threat.

U.S. Trade Representative Jamieson Greer stated on X that the deal will include "comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions that will continue to protect our market and American workers, along with our Canadian partners." Following a meeting with Canada-U.S. Trade Minister Dominic LeBlanc on Wednesday morning, Greer expressed confidence in reaching an agreement to protect American workers and strengthen the North American economy, suggesting that "some of the irritants that we've had in the past year" have been eliminated.