Trump hits pause on Canada tariffs threat, and hints at revival of Keystone XL oil pipeline project

Canada has narrowly avoided a significant 50% tariff on its goods, striking a deal with the Trump administration hours before the increase was set to take effect. The duties, which would have impacted approximately $20 billion worth of Canadian exports, including wine and hockey sticks, were paused by President Donald Trump on social media.

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based on the fact that Canada and the USA, subject to the finalization of documents, have a DEAL!

Trump announced the three-day pause, stating it was "based on the fact that Canada and the USA, subject to the finalization of documents, have a DEAL!" In the same post, he hinted at the potential revival of the Keystone XL oil pipeline project, suggesting it "may be awoken from the grave," though he provided no further details or confirmed if it was linked to the tariff agreement.

The Keystone XL pipeline, proposed in 2008 to transport oil from Canada's tar sands to U.S. refineries, was halted in 2021 by owner TC Energy after President Joe Biden revoked a key permit. The project became a major point of contention in U.S.-Canada relations, facing opposition from U.S. landowners, Native American tribes, and environmental groups concerned about spills and environmental impact.

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may be awoken from the grave

This eleventh-hour agreement comes after a year of escalating tensions between the two countries, marked by tit-for-tat tariffs and public disputes. Previously, in February 2025, the White House imposed a 25% tariff on Canadian goods, citing inadequate progress in curbing illegal immigration and drug trafficking. Canada retaliated with reciprocal levies, countering U.S. claims and asserting its border protection measures.

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intense and delicate

Tensions flared again in July 2026 when the White House announced the 50% tariffs, aiming to hold Canada accountable for alleged discrimination against U.S. cars, alcohol, and dairy products. Top officials from both nations engaged in "intense and delicate" talks in the days leading up to the deadline. Historically, the U.S. and Canada are strong trading partners, with bilateral trade estimated at roughly $909 billion in 2024. The recent tariff threat had raised concerns among Canadian business owners about financial devastation and unsustainable export costs.

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not the time to talk about negotiations in public