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By EnergyNow Editorial Staff
U.S. President Donald Trump has delayed threatened 50% tariffs on Canadian goods for three days as Canada and the United States work to finalize a new trade agreement, with Trump once again raising the possibility of reviving the Keystone XL pipeline.
Trump announced the tariff pause Tuesday evening, just hours before the new duties were scheduled to take effect.
In a post on Truth Social, Trump said the tariffs had been delayed because the two countries had reached what he described as a deal, subject to final documentation.
“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!” Trump wrote.
Trump then specifically pointed to Keystone XL, signalling that energy infrastructure could potentially become part of the broader Canada-U.S. economic discussion.
“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” Trump said.
The announcement means Canada will, at least temporarily, avoid a new round of tariffs affecting approximately $28 billion worth of Canadian goods.
Canadian Prime Minister Mark Carney was more cautious in describing the status of negotiations.
In a statement Tuesday evening, Carney said Canada and the United States had made “substantial progress” in negotiations but added that “important work still needs to be done.”
According to Carney, Washington agreed to postpone implementation of the 50% tariffs until the end of Aug. 21 while negotiations continue.
Keystone XL Returns to the Canada-U.S. Conversation
For Canada’s energy industry, Trump’s decision to specifically mention Keystone XL could prove particularly significant.
The proposed pipeline was designed to transport Canadian crude from Alberta into the U.S. pipeline and refining system through Nebraska.
Former U.S. president Joe Biden revoked the project’s presidential permit through an executive order on his first day in office, effectively ending the project at the time.
Trump has repeatedly supported Keystone XL and, after returning to office, moved to encourage efforts aimed at reviving portions of the project.
Whether Keystone XL will ultimately become part of a Canada-U.S. trade agreement remains unclear.
Trump’s decision to highlight the pipeline alongside his tariff announcement, however, once again connects energy infrastructure with the broader economic and trade relationship between the two countries.
Carney spoke with Trump by telephone Tuesday, only hours before the tariffs were scheduled to take effect.
Canadian negotiations were being led by Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette, who were in Washington meeting with U.S. officials.
Broader Tariff Issues Remain
The threatened 50% tariffs covered a wide range of Canadian exports, including products such as cement, wine, honey and hockey equipment.
Canadian negotiators have also been seeking relief from existing U.S. tariffs affecting several economically important sectors, including steel, aluminum, lumber and automobiles.
It remained unclear Tuesday night exactly what concessions had been made by either country or what provisions would ultimately be included in a finalized agreement.
For Canada’s oil and gas industry, the biggest unanswered question may be whether Trump’s reference to Keystone XL represents a negotiating position, a broader policy objective, or the beginning of a serious effort by Washington and Ottawa to reconsider additional pipeline capacity between the two countries.
Despite Canada’s efforts to diversify its energy exports through projects such as the Trans Mountain expansion and new LNG export capacity, the United States remains Canada’s most important energy customer.
Additional pipeline capacity into the U.S. could therefore have significant implications for Canadian producers, North American refinery supply and the broader Canada-U.S. energy relationship.
For now, the immediate tariff threat has been postponed — but only briefly.
With the three-day window running through Aug. 21, attention will now turn to whether negotiators can convert what Trump called a “DEAL” into a finalized agreement, and whether Keystone XL emerges as part of the discussions.
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