Trump: US, Canada Make Tariff Deal     08/19 06:08

   President Donald Trump said Tuesday he was delaying the 50% U.S. tariffs on 
$20 billion worth of Canadian imports after the two countries reached a 
last-minute deal less than two hours before the sanctions were to go into 
effect.

   WASHINGTON (AP) -- President Donald Trump said Tuesday he was delaying the 
50% U.S. tariffs on $20 billion worth of Canadian imports after the two 
countries reached a last-minute deal less than two hours before the sanctions 
were to go into effect.

   The announcement, which Trump made on his social media platform, buys time 
for more negotiations and avoids, for now, another strain in already tense 
relations between the historic allies.

   "I have paused the 50% Tariffs against Canada, that 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!" Trump 
posted on Truth Social.

   If they had gone into effect as scheduled at 12:01 a.m. Wednesday, Trump's 
import taxes would have hit Canadian products ranging from hockey sticks to 
tongue depressors.

   But the political impact would likely have been bigger than the economic 
one. Canada had threatened to retaliate against any new tariffs with levies of 
its own, aggravating a trade fight between countries that sold each other $880 
billion worth of goods and services last year.

   A White House proclamation said Canada had expressed a commitment to remove 
measures the Trump administration considers discriminatory against U.S. 
alcohol, dairy and motor vehicle exports. Canada did not immediately confirm 
those commitments.

   Canadian Prime Minister Mark Carney said in a statement "substantial 
progress" had been made but that important work remained, confirming Canada had 
agreed to the three-day delay while negotiations continued.

   Carney and Trump had spoken twice by phone in the past two days about the 
ongoing negotiations, including a call Tuesday afternoon, Carney's office said, 
underscoring the last-minute push for a deal.

   Both countries had reason to step back from the brink. Nearly 72% of 
Canada's goods exports last year went to the United States. And the Trump 
administration would be taking a risk by imposing a hefty new tariff -- paid by 
U.S. importers who try to pass along the cost to consumers via higher prices -- 
ahead of November's midterm elections. U.S. voters are already frustrated with 
the high cost of living.

   "I don't think either side really wants these tariffs to come into effect,'' 
Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, 
said before the delay was announced. "There's a pretty strong push on both 
sides to find an off-ramp here.''

   Canadian Chamber of Commerce President and CEO Candace Laing said in a 
statement that the three-day tariff delay offered businesses some relief but 
fell short of the certainty a signed interim agreement would provide.

   "This limbo state is not anyone's preferred outcome," she said, urging 
negotiators to reach a deal quickly.

   Trump's approach to dealing with Canada marks an extraordinary departure 
from the traditionally cooperative relationship between the two countries. 
Trump has hit Canadian goods with tariffs -- in a push to bring manufacturing 
back to the U.S. -- and has repeatedly made inflammatory comments about turning 
Canada into America's 51st state.

   Trump has made tariffs the centerpiece of his second-term economic agenda. 
Last year, he imposed double-digit import taxes on almost every country, 
justifying them by declaring the longstanding U.S. trade deficit a national 
emergency. The Supreme Court in February ruled that he'd overstepped his 
authority, striking down those tariffs and setting the stage for the federal 
government to pay refunds to importers.

   So Trump has looked for other legal authority to impose tariffs.

   To hit Canada, he reached back to the Great Depression, invoking Section 338 
of the Tariff Act of 1930 to threaten 50% tariffs on products that account for 
about 5% of Canadian exports to the United States.

   Nearly a century ago, with the U.S. and world economies in collapse, 
Congress passed the 1930 tariff law, imposing taxes on imports from around the 
world. Known as the Smoot-Hawley tariffs, named for their congressional 
sponsors, they are notorious among economists and historians for limiting world 
commerce and making the Great Depression worse.

   Section 338 tariffs have never been used before.

   Section 338 authorizes the president to impose tariffs of up to 50% on 
imports from countries that have discriminated against U.S. businesses. No 
investigation is required to justify the levies. Nor is there any limit on how 
long the tariffs can stay in place.

   The U.S. is renegotiating a North American trade pact -- the 
US-Mexico-Canada Agreement -- that Trump strong-armed America's neighbors into 
accepting in his first term. The threat of Section 338 tariffs gives the United 
States leverage to seek fresh concessions from Ottawa.