Updated: Aug 28, 2026
Based on reporting by CNBC Personal Finance. Research, structure, and fact-checking by Groundwork.
President Donald Trump paused imposing 50% tariffs on certain Canadian imports, citing a 'deal' with Canadian Prime Minister Mark Carney.
Based on reporting by CNBC Personal Finance. Research, structure, and fact-checking by Groundwork.
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“The Section 338 tariffs are a rare and powerful tool that the president can use to address trade imbalances. However, they can also have unintended consequences, particularly for small businesses.”
President Donald Trump paused imposing 50% tariffs on certain Canadian imports, citing a 'deal' with Canadian Prime Minister Mark Carney.
The tariffs were set to kick in at midnight, covering roughly $20 billion worth of Canadian imports. The duties would have impacted imports of hockey sticks, wine, and other Canadian goods.
President Trump announced the pause on Truth Social, stating that Canada and the U.S.A. have a 'deal' subject to the finalization of documents. The announcement comes after Trump and Canadian Prime Minister Mark Carney held trade talks on Tuesday.
The 50% tariffs would have posed major challenges to Canadian sellers, particularly small businesses. A 50% tariff essentially makes a product uneconomic to sell into a particular market, said Dan Kelly, president of the Canadian Federation of Independent Business.
The tariffs were being imposed under Section 338 of the Tariff Act of 1930, a Great Depression-era law that has rarely been invoked. The law allows the president to impose tariffs on goods that are deemed to be unfairly traded.
Many Canadian businesses rely heavily on trade with the U.S.A. A 50% tariff could grind their U.S. sales to a halt, said Kelly. Some businesses have already seen U.S. buyers hold off on future orders in anticipation of the new duties.
The Trump administration has already imposed various tariffs on Canada, including metals, lumber, and auto parts. The Section 338 tariffs 'really strike at the heart of small business trade between Canada and the United States,' because so many of the targeted products are consumer-oriented, said Kelly.
Some of the Trump administration's tariffs on Canada include exemptions for goods compliant with the trilateral North American trade deal known as USMCA.
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David Sterling (2026). Trump Pauses 50% Scheduled Tariffs on Canada, Announces 'Deal' with Ottawa. Groundwork. Retrieved from https://gworky.com/article/trump-pauses-50-tariffs-canada
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moneyThe Section 338 tariffs are a type of tariff imposed under Section 338 of the Tariff Act of 1930. They are used to address trade imbalances and can have a significant impact on businesses that rely on trade with the U.S.A.
David Sterling is a personal finance writer covering mortgages, banking, insurance, and investing for Groundwork. He turns complex financial research into practical decisions.
President Trump also suggested that the Keystone XL pipeline could be 'awoken from the grave.' The pipeline refers to an extension of a pipeline system in Canada and the United States. Trump had authorized the project in his first term, but former President Joe Biden had revoked the permits in 2021.
The finalization of the 'deal' between Canada and the U.S.A. is subject to the finalization of documents. The details of the agreement are not yet clear.
The Section 338 tariffs are a rare and powerful tool that the president can use to address trade imbalances. However, they can also have unintended consequences, particularly for small businesses.
Assuming a 50% tariff on Canadian imports, the impact on Canadian businesses could be significant. Here is a rough amortization timeline:
A 50% tariff could make a product uneconomic to sell into the U.S. market. Here is a rough break-even comparison:
President Trump paused imposing 50% tariffs on certain Canadian imports, citing a 'deal' with Canadian Prime Minister Mark Carney. The tariffs were set to kick in at midnight, covering roughly $20 billion worth of Canadian imports. The details of the agreement are not yet clear, but the impact on Canadian businesses could be significant.
The Section 338 tariffs are a rare and powerful tool that the president can use to address trade imbalances. However, they can also have unintended consequences, particularly for small businesses. The finalization of the 'deal' between Canada and the U.S.A. is subject to the finalization of documents.
The tariffs would have impacted imports of hockey sticks, wine, and other Canadian goods.
The 50% tariff could grind Canadian businesses' U.S. sales to a halt, said Dan Kelly, president of the Canadian Federation of Independent Business.
The Keystone XL pipeline refers to an extension of a pipeline system in Canada and the United States. President Trump had authorized the project in his first term, but former President Joe Biden had revoked the permits in 2021.
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