Tuesday's extension is welcome news for Canadian negotiators and for businesses on both sides of the border, who have warned that the new tariffs would be harmful to both countries.

Tensions have mounted between the two major trading partners since Trump returned to office in January last year and he unleashed a wide-ranging global programme of tariffs, upending decades of free trade between Canada and the US.

The latest tariffs threatened by Trump were to be applied on a range of Canadian imports, including wine, dairy, cement, clothing and hockey equipment.

They would have been in addition to existing tariffs the US had already imposed on Canadian steel and aluminium, autos and lumber.

Canada has been in pursuit of a deal that would have the US drop or reduce tariffs on these key sectors.

The US, meanwhile, has been asking for a number of concessions from Canada, including removing its remaining retaliatory tariffs on American autos and adjusting its dairy quotas to allow greater access for US cheese producers.

It has also asked for the ban on US alcohol sales, imposed last year by most Canadian provinces in retaliation to Trump's tariffs, be removed.

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