Late Tuesday night, US President Donald Trump delayed 50% tariffs on Canadian goods that were due to take effect yesterday, saying the two countries have reached the outline of a deal. Canadian and US trade negotiators were working diligently to reach a satisfactory agreement. Still, until a deal is finalized, Canadian companies will be gripped with uncertainty. Here’s what led to the delay and what’s next.

• The tariffs were set to go into effect on August 19. Trump had announced the 50% levies on about US$20 billion (C$28 billion) of Canadian goods last month under Section 338 of the Tariff Act of 1930, an obscure Depression-era law, arguing Canada was discriminating against US-made autos, alcohol and dairy products.
• The list of affected products was wide-ranging, from cement and furniture to hockey sticks and wine, covering roughly 5% of Canadian exports to the US.
• Less than two hours before the deadline, Trump announced a pause. He posted on Truth Social that he had paused the tariffs for three days as the two sides were working towards some final details of a deal.
• In his initial statement, Canadian Prime Minister Mark Carney acknowledged that progress towards a deal had been made, but there is still much work to do before a final deal is reached. Yesterday, Carney noted that both sides are moving towards an agreement that would be good for Canada.
• A White House proclamation said Canada had committed to removing measures seen as discriminatory against US alcohol, dairy and auto exports. A person familiar with the matter said tariffs on Canadian steel and aluminum may be halved in the new deal.

Signs point to the two sides finalizing a deal, which would make sense since most of Canada’s exports go to the US, and new tariffs risked raising costs for US consumers ahead of the country’s midterm elections. Still, business groups say a three-day delay offers relief but not certainty, and the underlying dispute, tied to the broader Canada-United States-Mexico Agreement renegotiation, remains unresolved.

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