Trump said late Tuesday that the U.S. and Canada had reached a tentative agreement to avoid new 50% tariffs on Canadian wine, hockey sticks, and other products. He posted the news on Truth Social at 10:15 p.m., just hours before the tariffs were due to start at 12:01 a.m. ET Wednesday.
The tariffs covered roughly $20 billion worth of Canadian goods, imposed last month over what the U.S. called trade discrimination. Trump paused them for three days while the final paperwork gets done.
"Based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!" Trump wrote.
The announcement came after what Trump described as a "very good conversation" with Canadian officials. He said they called and gave the U.S. the points it needed, and he framed the outcome as a "very fair deal for both."
The back-and-forth has been building for weeks. The U.S. first threatened the tariffs last month, Canada responded with its own measures, and that cycle kept businesses guessing about what would come next.
The details are still coming together, but both sides say real progress was made. Canadian Prime Minister Mark Carney said substantial progress has been achieved, though important work remains before anything is final.
According to Trump's remarks, the agreement might also adjust the existing U.S. duties on vehicles imported from Canada.
Carney said the two countries 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."
The deal may also bring back the Keystone XL pipeline, which Biden canceled in 2021. Trump shared an AI-generated image of himself pulling a pipeline labeled "KEYSTONE" out of the ground and wrote that it "may be awoken from the grave!"
U.S. Trade Representative Jamieson Greer said the agreement includes comprehensive market access for American goods, economic security commitments, and digital trade alignment. He met with Canadian Trade Minister Dominic LeBlanc and told reporters the two sides have "eliminated some of the irritants" from the past year.
Nothing is locked in until the documents are signed. Trump repeated that the deal is subject to finalization, and Carney stressed there is still important work to do.
Still, the direction is clear. Both governments want to avoid a trade war that would raise prices on everyday items like wine and hockey sticks.
For investors, that means less uncertainty about cross-border trade, which is a relief for companies that depend on it. The bigger question is whether this holds over time.
The Keystone piece is worth watching too. The pipeline was a political flashpoint when Biden canceled it in 2021, and reviving it would be a major shift in energy policy that could ripple into energy stocks and infrastructure spending.
For now, the immediate threat of new tariffs is off the table. That alone is worth something to anyone who has been watching prices and portfolios bounce with every headline.
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