US President Donald Trump has temporarily halted the planned 50 per cent tariffs on Canadian imports after the United States and Canada reached a last-minute deal. The tariffs were set to take effect early Wednesday and would have covered around USD 20 billion worth of Canadian goods. Trump’s decision gives both countries more time to complete the deal and continue negotiations.

Trump announced the move on his social media platform, Truth Social, less than two hours before the 12.01 am Wednesday deadline. He said the tariffs would remain paused for three days while both sides work on finalising the necessary documents.

"I have paused the 50 per cent tariffs against Canada, that were scheduled to kick in tomorrow morning, for a three-day period, based on the fact that Canada and the USA, subject to the finalisation of documents, have a DEAL!" Trump posted on Truth Social less than two hours before the 12.01 am. Wednesday deadline.

The planned US tariffs would have affected about 5 per cent of Canada's annual exports to the United States. The affected goods include a wide range of products, from hockey sticks to tongue depressors. While the direct economic impact would have been limited compared with the overall trade between the two countries, the move had wider political risks.

Canada had warned that it would respond with tariffs of its own if the United States imposed the new duties. Such a move could have intensified the ongoing trade dispute between the two countries. The United States and Canada exchanged around USD 880 billion worth of goods and services last year, making them major trading partners.

The latest development comes amid already strained relations between the two historic allies. The temporary pause prevents another round of tariffs from taking effect immediately. It also gives officials from both sides additional time to settle the terms of their agreement.

Trump's decision does not mean the tariffs have been permanently cancelled. The pause will last for three days, subject to the completion of the required documents. The two countries are expected to use this period to finalise the agreement and avoid a fresh escalation in their trade dispute.

The proposed 50 per cent tariffs had raised concerns over a possible retaliatory response from Canada. Such measures could have increased costs for businesses and added further pressure to trade relations. For now, the last-minute agreement has prevented the new US tariffs from taking effect and opened the door for further negotiations.

The development also highlights the fragile state of US-Canada trade relations. Despite their close economic ties, disagreements over tariffs have continued to create tensions. With the latest three-day pause, both countries have a short window to finalise the deal and prevent another escalation.