What Trump gets wrong about Canada-U.S. dairy trade

Holly Cabrera · CBC News

· Posted: Mar 14, 2025 4:00 AM EDT | Last Updated: 1 infinitesimal ago

Once again, U.S. President Donald Trump lambasted Canada connected Wednesday — this time, for allegedly imposing exuberant tariffs connected dairy products.

Those claims, made during a White House sojourn from the Irish premier minister, come little than a week aft helium mischaracterized the Canada-U.S.-Mexico Agreement (CUSMA) — a woody helium negotiated — making an important omission portion stating that Canada is charging much than 200 per cent tariffs connected dairy products.

Here's an overview of Canada-U.S. dairy trade, addressing points the president has precocious called into question.

Why is dairy commercialized contentious?

During the North American Free Trade Agreement (NAFTA) renegotiations successful 2018, the Trump medication sought to person Canada bash distant with its decades-old proviso absorption system.

It is simply a nationalist argumentation model meant to guarantee predictable and unchangeable prices by guaranteeing supply-managed farmers a minimum terms for their products.

American dairy farmers argued that the mode the Canadian authorities allocates its tariff-free dairy import permits denies them afloat entree to the 3.5 per cent stock of Canada's marketplace they thought they'd gained successful CUSMA, the revised NAFTA.

Canada's proviso absorption strategy relies connected the power of imports and enables the dairy, poultry and ovum sectors to bounds the proviso of their products to what Canadians are expected to consume.

Under some CUSMA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with Pacific Rim dairy exporters similar New Zealand, Canadian dairy processors efficaciously power what enters their market.

Both the U.S. and New Zealand person taken purpose astatine the proviso absorption strategy done the quality colony processes successful their respective commercialized agreements.

U.S. farmers person entree to assorted national subsidy programs, specified arsenic the Dairy Margin Coverage and Dairy Revenue Protection programs, which assistance them withstand volatile markets.

When CUSMA came into unit connected July 1, 2020, it included a caller request for a reappraisal successful six years. CUSMA has a sunset clause that volition extremity the commercialized woody aft 16 years unless each enactment commits to renewing it for different term.

How overmuch dairy does Canada import from the U.S.?

Despite Trump downplaying however overmuch of an export marketplace Canada is for the U.S., the state has been consistently 1 of the apical importers of U.S. cultivation products, according to the U.S. Department of Agriculture.

Last year, Canada was the second-highest importer of U.S. dairy products, buying astir $1.14 cardinal US, and it was the United States' apical export marketplace for eggs and related products.

WATCH | Canada hits backmost astatine U.S. tariffs: 

The section said connected its website successful June 2024 that Canada represents "one of our astir important and reliable trading partners."

The full cultivation and related merchandise exports to Canada from the United States amounted to astir $28.2 cardinal US in 2023.

Has Canada hiked its dairy tariffs?

High Canadian tariffs lone use if the agreed tariff-rate quotas connected U.S. dairy imports nether CUSMA are reached oregon exceeded.

However, the U.S. Department of Agriculture said successful February that "almost all agricultural products traded betwixt the United States and Canada" are escaped of tariffs oregon quotas.

Unlike what Trump is claiming, Canadian tariffs didn't leap during the Biden administration, since the U.S. is acold from reaching the zero-tariff bounds for dairy products.

For instance, successful 2025, Canada would use a 298.5 per cent levy on above-maximum food and 245.5 per cent for above-maximum cheddar cheese. Those were the aforesaid rates applied successful 2017 and 2020.

Even the International Dairy Foods Association (IDFA) published a connection connected March 7, which says the U.S. "has ne'er gotten adjacent to exceeding" the quotas. It besides expressed concerns astir rising costs owed to the ongoing commercialized warfare with the U.S.'s "top trading partners." 

What did the U.S. summation from Canada successful dairy trade?

Under CUSMA, Canada provides caller tariff complaint quotas exclusive to the United States.

The U.S. gained much marketplace entree successful Canada for its products, with Canada agreeing not to use tariffs connected definite amounts of U.S. dairy product imports per year such as:

• Fluid milk.
• Cheese.
• Cream.
• Skim beverage powder.
• Butter and pick powder.
• Concentrated and condensed milk.
• Yogurt and buttermilk.
• Powdered buttermilk.
• Products of earthy beverage constituents.
• Ice pick and crystal pick mixes.
• Other dairy.
• Whey.

Canada also eliminated 2 beverage terms classes and guarantees that the terms of skim beverage solids utilized to nutrient non-fat adust milk, beverage macromolecule concentrates and babe look volition beryllium acceptable nary little than a level based connected the United States terms for non-fat adust milk.

Canada besides committed to follow measures designed to bounds the interaction of immoderate surplus skim beverage accumulation connected outer markets.