A last-minute pause buys time but leaves Canada's mortgage market in limbo
United States President Donald Trump paused threatened 50% tariffs on nearly $28 billion of Canadian goods late Tuesday, citing a breakthrough in negotiations that could determine the conditions for Canada's mortgage market recovery heading into the fall.
Trump announced the three-day reprieve in a social media post less than two hours before the levies were set to take effect at 12:01 AM ET on Wednesday on a wide range of Canadian exports, including wine, dairy, lumber, cement, clothing, and hockey equipment.
The pause expires at the close of business Friday, August 22, setting a tight new deadline for negotiators on both sides of the border.
Prime Minister Mark Carney declined to characterise the development as a done deal.
"Substantial progress has been made, although there is important work still to be done," his office said in a statement Wednesday.
Canada-US Trade Minister Dominic LeBlanc returned to Washington early that morning alongside Canada's chief trade negotiator, Janice Charette, for a second round of talks at the office of US Trade Representative (USTR) Jamieson Greer.
"We have a bit more work we need to do," LeBlanc told reporters on his way into the meeting.
Trump, speaking separately to reporters, described the outcome as "a very good deal" for both countries, saying he expected Canadian tariffs on American goods to be "totally eviscerated, down to zero."
He also said the US agreed to "readjust" its tariff rates on Canadian autos without specifying by how much.
What's on the table for mortgage markets
The latest tariff threat would have compounded existing levies on steel, aluminium, autos, and lumber — inputs that feed directly into construction costs and, ultimately, the affordability of new housing stock.
Tariff-related uncertainty and its growing impact on Canada's housing market has shadowed mortgage professionals throughout 2025 and into 2026.
Canadian home sales fell 1.9% in 2025 compared with the prior year, according to the Canadian Real Estate Association (CREA), with tariff-related economic anxiety pushing buyers to the sidelines throughout much of the year.
A resolution that lifts the cloud of trade uncertainty could be as consequential for buyer confidence as any Bank of Canada rate cut.
The central sticking points in negotiations have included auto tariffs, changes to Canada's dairy quota system, and the reinstatement of American liquor on provincially run store shelves.
A proposal circulating in the final hours of talks would lower tariffs on Canadian-made vehicles from 25% to 15%, with the effective rate potentially falling to approximately 7.5% for vehicles with sufficient US content, still higher than Canada's negotiating position.
Trump also raised the possibility of reviving the long-dormant Keystone XL pipeline, which would carry Alberta oil to US Gulf Coast refineries.
Three days to close — and what comes next
For Canadian mortgage professionals, the next 72 hours could bring either badly needed clarity or another extension of the stop-and-start uncertainty that has suppressed buyer activity since Trump first threatened sweeping tariffs on Canadian imports in January 2025.
Greer posted on social media that the framework agreement in principle covers "comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions" for both sides, though neither government had released formal documentation as of Wednesday morning.
Businesses on both sides of the border have warned repeatedly that tariff uncertainty, even when the levies themselves have not fully materialised, is already disrupting supply chains and dampening investment.
For Canada's mortgage industry, a clean resolution by Friday would represent the clearest signal yet that the conditions for a sustained housing market recovery are finally beginning to take shape.
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