Trump pauses 50% tariffs on Canadian goods for 3 days

President Trump said Tuesday night he is pausing for three days 50% tariffs on billions of dollars worth of Canadian goods that were set to take effect early Wednesday.

Why it matters: It follows an intense push in recent days — including talks between Trump and Canadian Prime Minister Mark Carney on Tuesday — to avert another escalation in the North American trade war.

What they're saying: "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 wrote on Truth Social.

• "The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!"

Driving the news: Trump last month threatened to invoke Section 338 of the Tariff Act of 1930 to hit a slew of Canadian goods with additional 50% duties, including alcohol, hockey equipment, cement and dairy products and cement.

• No president has ever used Section 338 to impose tariffs since it became law in 1930.
• The tariffs were scheduled to take effect at 12:01 a.m. ET Wednesday. The administration carved out key Canadian exports, including energy, potash and critical minerals, from the new tariffs.

Catch up quick: The U.S.-Canada trade fight has escalated over the past year.

• The Trump administration said these tariffs were aimed at countering Canadian policies that U.S. officials allege discriminate against America's auto and dairy exports.
• Officials were also taking aim at Canada's earlier retaliation, including provincial bans on American alcohol.

The intrigue: Canada's alcohol boycott has become a major sticking point in negotiations.

• Top Trump officials have explicitly cited the province-level restrictions in making the case for the new tariffs, repeatedly pointing out that Canada and China were the only two countries to retaliate against Trump's tariffs rather than negotiate a deal.

What to watch: Trump has also threatened to impose tariffs over Canadian wildfire smoke drifting into the U.S. earlier this summer.

What to watch: Whether the tariff reprieve breaks way to a broader U.S.-Canada trade agreement.