US Delays 50% Tariffs on Canada, Hints at Reviving Keystone XL Pipeline
Uwa Ede-Osifo
Canada has temporarily avoided the 50% tariffs the US planned to impose on $20 billion worth of goods, after officials from both countries reached a last-minute deal. President Donald Trump announced a three-day delay and hinted at reviving the Keystone XL pipeline project.
Canada has temporarily avoided the 50% tariffs the US planned to impose on $20 billion worth of goods, after officials from both countries reached a deal on Tuesday evening, just hours before the new tariffs were set to take effect.
On social media, President Donald Trump announced a three-day delay, stating that the two sides had reached a "deal" pending completion of paperwork. The tariffs would have initially impacted a range of Canadian exports, including wine and hockey sticks.
In the same post, Trump said the controversial Keystone XL pipeline project "could be awakened from the grave," but provided no details or clarity on whether this was linked to the tariff agreement.
Keystone XL was proposed in 2008 to transport oil from Canada's western oil sands to US refineries. The over 1,900-kilometer project was halted by its owner, TC Energy, in 2021 after President Joe Biden revoked a key US permit. The project had become a flashpoint in US-Canada relations due to opposition from American landowners, indigenous tribes, and environmentalists.
Other North American oil pipelines, such as Dakota Access and Enbridge Line 3, have also faced ongoing opposition from environmental groups over concerns about oil spills.
The last-minute deal comes amid a year of tense relations between the two countries. The long-standing alliance has been tested by retaliatory tariffs and online attacks, with Trump previously expressing a desire to make Canada a US state.
In February 2025, the White House imposed 25% tariffs on Canada, citing insufficient efforts to curb illegal immigration and cross-border drug flows. In response, Canada announced retaliatory tariffs, calling the US actions "unjustified and unreasonable." The Canadian government also rejected the Trump administration's claims, asserting it had implemented border protection plans and that less than 1% of fentanyl and illegal immigrants came through Canada.
Tensions escalated further in July 2026 when the White House announced 50% tariffs, citing Canada's discrimination against American cars, wine, and dairy products.
In recent days, senior officials from both countries have engaged in "intense and delicate" negotiations, according to Canadian Prime Minister Mark Carney. He also said it was "not the time to discuss negotiations publicly."
Historically, Canada and the US have been strong trading partners. In 2024, bilateral trade between the two countries was estimated at approximately $909 billion, according to the US Trade Representative's Office.
The new US tariffs have raised financial concerns and fears of unsustainable export costs for Canadian businesses, according to CBC. Some goods previously protected from import duties under the US-Mexico-Canada Agreement (USMCA), negotiated by Trump, were not exempted from the new tariff wave.
