US President Donald Trump has postponed a planned 50% tariff on Canadian goods for three days, signalling that negotiations between the two countries are nearing completion despite remaining disagreements on key trade issues.

Donald Trump announced a temporary halt to tariffs on Canadian imports scheduled to take effect on Wednesday, pausing a 50% levy on approximately US$20 billion worth of goods. The three-day delay comes as negotiations between American and Canadian officials intensify, with both sides reportedly close to finalising a comprehensive trade agreement. Trump stated the pause was based on progress made during recent discussions between himself and Canadian Prime Minister Mark Carney.

Tensions between the two trading partners have escalated since Trump's return to office in January, when he initiated a broad tariff programme that disrupted long-standing trade relationships. The suspended tariffs would have affected numerous Canadian exports including wine, dairy, cement, clothing and hockey equipment, layering additional duties on top of existing American tariffs on steel, aluminium, autos and lumber. According to reports, negotiators were discussing a reduction of US auto tariffs from 25% to 15%, though disagreement persists over which vehicles would qualify for relief based on American-made content requirements.

The negotiations have centred on competing demands from both nations. Canada seeks reduced or eliminated tariffs on key export sectors, while the US has requested several concessions including removal of Canadian retaliatory tariffs on American automobiles, increased dairy quotas for US cheese producers, and the lifting of provincial bans on US alcohol sales imposed during earlier trade disputes. Provincial buy-in will be required from Canadian leaders for any alcohol sales agreement, as liquor distribution falls outside federal jurisdiction.

Trump also indicated that a final trade deal could enable revival of the Keystone XL pipeline, a long-disputed oil infrastructure project previously blocked by the Obama and Biden administrations. The pipeline would transport 830,000 barrels of oil daily from Alberta to the United States, a prospect opposed by environmental and indigenous groups but favoured by both Trump and Canadian negotiators.