Trump Pauses Canada Tariffs, Floats Reviving Keystone XL

Canada temporarily avoided a 50% US tariff after reaching an agreement with Trump administration officials Tuesday evening, hours before the increase — which would have affected $20 billion worth of goods — was set to take effect.

President Donald Trump wrote on social media late Tuesday that he had paused the tariffs for three days "based on the fact that Canada and the USA, subject to the finalization of documents, have a DEAL!" The duties would have hit a range of Canadian exports, including wine and hockey sticks.

In the same post, Trump said the long-stalled Keystone XL pipeline project "may be awoken from the grave," without elaborating or saying whether it was tied to the tariff agreement.

Keystone XL, first proposed in 2008 to carry oil from Canada's western tar sands to US refiners, was halted in 2021 when owner TC Energy scrapped the 1,200-mile project after President Joe Biden revoked a key permit. It became a flashpoint in US-Canada relations amid opposition from American landowners, Native American tribes and environmental groups, which have also long opposed pipelines such as Dakota Access and Enbridge Line 3 over spill concerns.

Tuesday's eleventh-hour agreement follows a tense year between the two countries. In February 2025, the White House imposed a 25% tariff on Canada, citing insufficient action on cross-border immigration and drug trafficking. Canada responded with its own retaliatory tariff, calling the US measure "unwarranted and unreasonable" and noting that less than 1% of fentanyl and illegal crossings originated from Canada.

Tensions escalated again in July 2026 when the White House announced the 50% tariffs, saying they were meant to hold Canada accountable for discrimination against US-made cars, alcohol and dairy products. Canadian Prime Minister Mark Carney told reporters Monday that officials from both countries were engaged in "intense and delicate" talks, adding that it was "not the time to talk about negotiations in public."

Canada and the US have long been major trading partners, with bilateral trade estimated at roughly $909 billion in 2024, according to the US trade representative's office. The looming 50% tariff had stirred concern among Canadian business owners about financial strain and unsustainable export costs, according to the CBC. Some goods previously protected under the USMCA trade deal were not shielded from the latest tariff round.