Canada hits pause on tariff hike as Trump extends trade deadline - Politico

Investing.com -- Canada is pausing its planned escalation of retaliatory tariffs on U.S. steel and aluminum, Politico reports, after President Donald Trump extended a bilateral trade negotiation deadline to August 1, while simultaneously threatening new tariffs. The shift offers both nations a narrow window to avoid a broader trade rupture, though tensions remain high over economic and security issues.

According to two Canadian government officials cited by Politico, Ottawa will no longer proceed with plans to double its tariffs on U.S. metals from 25% to 50% on July 21. The officials noted that Canada’s current 25% countermeasures will remain in place during the extended talks for a new economic and security agreement.

Trump’s letter to Canadian Prime Minister Mark Carney outlined a new 35% tariff set to take effect August 1, separate from existing sectoral duties on vehicles and commodities. In it, Trump cited concerns over the alleged flow of fentanyl from Canada and what he described as “unfair trading practices,” including tariffs of up to 400% on U.S. dairy exports.

“There will be no tariff if Canada, or companies within your country, decide to build or manufacture production within the United States,” Trump wrote. He added that he would “consider an adjustment” to the planned tariffs if Canadian cooperation on drug policy improves.

The White House’s broader tariff directive this week applies new levies across multiple economies, including a 25% duty on both South Korea and Japan. These measures largely follow outlines from Trump’s April announcement, dubbed “liberation day,” though implementation has been delayed from July 9 to August 1.

While the deadline extension has eased near-term pressure, officials on both sides have not ruled out escalation should a deal fail to materialize. Both Washington and Ottawa have threatened expanded duties on a wider range of goods if progress stalls.

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