Trump Delays Canadian Tariffs

OMAHA (DTN) -- President Donald Trump late Tuesday paused 50% tariffs on $20 billion in Canadian products, including cheese, and rekindled the possibility of another U.S.-Canada oil pipeline, the Keystone XL.

Trump had announced in July that 50% tariffs against some Canadian goods would begin on Aug. 19. With roughly two hours to spare Tuesday night, Trump posted on Truth Social, "I have paused the 50% Tariffs against Canada, which 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! The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!"

The White House posted a proclamation stating that, according to senior officials, "Canada has expressed a commitment to remove the discriminations or unreasonable and unequal impositions," tied to Trump's initial move to invoke the tariffs. Trump had accused Canada of discriminating against alcohol products and unfairly discriminating against U.S. cheese products of all types. The proclamation does not mention the pipeline.

Canadian Prime Minister Mark Carney also did not mention the pipeline in a statement issued late Tuesday. Carney said negotiators have "engaged in intensive discussions" to address trade issues and "deliver greater certainty and real benefits for Canadian businesses, workers, farmers, and families." Carney said progress has been made, but talks are ongoing.

"While we continue this work, Canada remains focused on building a stronger, more independent, and more competitive economy at home."

Keystone XL was an extension to the current Keystone pipeline system and would have run from Alberta, Canada, down through eastern Montana, South Dakota and Nebraska, connecting to a terminal in Steele City, Nebraska, and was expected to export up to 830,000 barrels of oil daily.

Initially proposed in 2008, the pipeline permit went through a ping-pong effect in administrations -- rejected by President Barack Obama in 2015, approved by Trump in 2017, and revoked by President Joe Biden in 2021. TC Energy ended the project in June 2021.

The pipeline project also sparked some rural protests in states, especially over the threat of eminent domain to run the pipeline through private property.

Canada currently exports roughly $90 billion in oil to the U.S. annually.

Trump's latest tariffs would have imposed 50% tariffs on about $20 billion in goods, though Canadian businesses export $380 billion to the U.S. annually. Products such as energy and potash fertilizer were excluded.

The tariffs would hit Canadian dairy exports to the U.S., which totaled $585 million last year. While the U.S. argues Canada discriminates against cheese products, U.S. dairy exports to Canada reached $1.3 billion last year.

Also see, "Clock Ticks on US-Canada Tariff Talks as Dairy Remains a Sticking Point," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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