The United States and Canada signalled on Wednesday that they were close to finalising a comprehensive trade deal, after US President Donald Trump paused implementing a new round of crippling tariffs.

"We've come to a deal with Canada," Trump said on Wednesday, adding that it's "subject to finalisation of documents."

He later added: "We may bring some of the tariffs down to a level where other countries are, because Canada was paying a higher tariff."

Canadian Prime Minister Mark Carney was more cautious, saying on social media that Ottawa and Washington "are now moving towards an agreement."

The planned US tariffs, set at 50 percent, were originally due to take effect on Wednesday on select Canadian goods.

But Trump announced late on Tuesday that he would delay their roll-out by three days as both sides worked to finalise a deal.

Bloomberg News reported on Wednesday that the tentative trade pact would halve US tariffs on some Canadian steel and aluminium exports to 25 percent, although different rates might apply to derivative products that contain the metals. The report added that details are not final.

Trump's tariffs on autos, steel, aluminium and forest products have hurt Canada's economy. Securing relief from those duties has been a priority for Ottawa through weeks of negotiations.

Carney on Wednesday applauded his Canada-US trade minister, Dominic LeBlanc, and Trump's top negotiator Jamieson Greer, for "significant progress" in the negotiations.

LeBlanc, in a separate social media post, said he met again with Greer in Washington on Wednesday and that both sides were "working collaboratively towards a finalised agreement."

Emerging from the meeting, Greer, who is the US trade representative, expressed confidence that they have a pact that will "strengthen the North American economy."

"While we certainly, I think, have eliminated some of the irritants that we've had over the past year, we also are taking a strong foot forward on the next steps," he said, according to CNBC.

Trump said on Wednesday it would benefit US farmers, who have complained about restricted access to Canadian markets.

In announcing the 50-percent tariffs, the White House had alleged "discriminatory treatment" by Canada against US alcohol, automobile and dairy products.

Carney said the deal secures "the best terms in each of Canada's most important strategic sectors and (provides) greater certainty about our future trading relationship."

Canada on July 1 also confirmed it wanted to renew the existing North American free trade agreement, but Trump declined to do so, demanding substantial changes.

The sides have been engaged in intense talks for weeks on a revised agreement. (AFP)



Edited by Cecil Wong