The three-day postponement is expected to spare about $20 billion worth of Canadian imports from the proposed duties as Washington and Ottawa work to finalise a trade agreement.

US President Donald Trump has postponed a planned 50% tariff on a range of Canadian goods, giving the United States and Canada three additional days to finalise a trade agreement.

Trump announced the decision on Truth Social, saying he had paused the tariffs, which were scheduled to take effect at 12:01 a.m. ET, after negotiations with Canada made what he described as significant progress.

The suspension is expected to spare about $20 billion worth of Canadian imports from the proposed duties.

The tariffs would have affected products including dairy, alcohol, furniture, plastics, clothing and industrial equipment, representing about 5% of the total value of US imports from Canada last year.

Unlike some previous US tariffs, the proposed duties would not have exempted goods qualifying under the United States-Mexico-Canada Agreement (USMCA).

Canadian Prime Minister Mark Carney confirmed the postponement through the end of August 21, saying substantial progress had been made but that important work remained.

Carney and Trump held talks on Monday and Tuesday as both governments sought to resolve the broader trade dispute and reach an agreement.

Trump had planned to impose the tariffs under Section 338, a little-known US trade law dating back to the 1930s that has never previously been used in this manner.

The proposed move was expected to face legal challenges, while the duties could have remained in place indefinitely without presidential intervention.

The US Chamber of Commerce had warned that the tariffs could increase costs for American families, disrupt supply chains and threaten millions of jobs linked to trade under the North American agreement.

The decision to delay the tariffs gives Washington and Ottawa additional time to resolve outstanding issues and reach a broader trade agreement as negotiations continue.