Echoing last month’s eleventh-hour announcement of new Section 301 tariffs, President Donald Trump announced a three-day pause on a planned 50% tariff on Canadian imports, giving U.S. and Canadian negotiators a narrow window to finish a last-minute trade agreement.

  • The tariffs were scheduled to take effect just after midnight Wednesday, but Trump said on social media late Tuesday that the two countries had reached a deal “subject to the finalization of documents.”


Canadian Prime Minister Mark Carney confirmed that the tariff pause would last through Friday and said “substantial progress” had been made, but “important work” remains. Carney and Trump spoke twice in the days leading up to the deadline, while Canadian trade officials held intensive talks in Washington with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.


Get the latest U.S. tariff updates in PPAI’s new tariff tracker.

Had the tariffs taken effect, they would have applied to a wide range of Canadian goods, including apparel. The duties would be the first use of Section 338 of the Tariff Act of ⁠1930, which allows for tariffs of up to 50% on imports from specific countries – and would apply the maximum rate to all covered products, regardless of eligibility under the United States-Mexico-Canada Agreement.

  • The U.S. declined to renew the trilateral agreement reached under the first Trump administration in July, triggering a new round of negotiations and uncertainty.


ICYMI: US Declines To Renew USMCA

Importantly, the pause offers some respite but not certainty. This latest announcement comes on the heels of new 25% duties on many imports from Brazil starting July 22, and additional Section 301 tariffs on imports from 60 countries starting July 24.

Tariffs have been an ongoing challenge for the branded merchandise industry, from stifling uncertainty caused by changing rates and policies to squeezed margins and supply chain disruptions. Trump has continued to focus on tariffs despite legal setbacks.

  • The U.S. government has now processed more than $100 billion in refunds – or more than half of the roughly $166 billion in tariffs collected under the International Emergency Economic Powers Act before the U.S. Supreme Court struck down those duties in February.

PPAI will continue to monitor these developments, provide updates to members and work on behalf of the industry for more favorable policies.

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Please contact Rachel Zoch, CAS, PPAI’s public affairs manager, at rachelz@ppai.org if you have any questions about regulatory issues or government affairs.