Late Tuesday, President Donald Trump’s strategy of using tariffs as leverage succeeded. Just less than two hours before a proposed 50 percent tariff on Canadian goods was set to begin, Canada opted to negotiate, leading Trump to extend the tariff deadline by three days to finalize an agreement.
The tariffs, targeting nearly $20 billion worth of Canadian exports, were initially scheduled to be enforced starting at midnight.
Trump announced that both nations have reached an understanding, contingent on the completion of formal documentation.
— Rapid Response 47 (@RapidResponse47) August 19, 2026
In his typical fashion, Trump teased a potential resurrection of the Keystone XL Pipeline, a project that President Joe Biden previously canceled, by suggesting, “The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” he wrote.
If Keystone is part of the final deal, it would be a generational reversal. One of the left’s most prized environmental victories, undone by a trade negotiation.
A White House proclamation issued Tuesday night formally moved the tariffs’ effective date from August 19 to 12:01 AM ET on August 22.
The delay applies to three sets of duties Trump ordered July 20. They grew out of fights over American liquor, dairy products, automobiles, and auto parts.
Canada pulled American liquor from store shelves last year in retaliation for Trump’s tariffs, but continued selling products from other countries without restriction. Trump also targeted Canada’s dairy quotas for U.S. cheese and its vehicle tariffs.
Canada Snubs U.S. at Bridge Opening, Trump Reminds Them Who Gets 50 Percent of the Revenue
Tuesday’s proclamation says Canada has promised to address all three disputes. That was enough for Trump to move the deadline to Saturday.
Trump turned to a provision no president had ever actually used to get there: Section 338 of the Tariff Act of 1930. The law allows a president to impose duties of up to 50 percent on any country found to be discriminating against American commerce. Tuesday’s threatened tariffs would have been the first time it was ever pulled off the shelf.
The U.S. Trade Representative’s office listed more access for American goods, economic security measures, digital trade rules, and protections for American workers. No actual agreement was published.
Canadian Prime Minister Mark Carney was notably less triumphant. While Trump was declaring a deal, Carney was carefully hedging.
“Substantial progress has been made, although there is important work still to be done,” Carney said.
Trump and Carney spoke Monday and Tuesday. Canada has also been pressing the United States to ease existing tariffs on steel, aluminum, automobiles, and lumber. Those duties remain in place for now. Tuesday’s order only moved the Section 338 tariffs.
Canada’s provinces control liquor sales, so Carney needs their help to get American bottles back on store shelves. Ontario Premier Doug Ford has said Ontario will end its ban if Canada gets a fair deal.
Keystone XL does not appear in Tuesday’s proclamation, and neither government had published a final agreement by early Wednesday. Canada has until 12:01 AM Saturday to deliver. If it doesn’t, the tariffs snap back automatically, and Trump doesn’t have to do a thing.
Editor’s Note: President Trump is fighting to ensure America’s kids get the education they deserve.
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