United States President Donald Trump has put a large target on Canada’s dairy tariffs as he announced plans to hit Canada with a 35 per cent tariff on everything on Aug. 1.
His threat comes amidst intense negotiations to reach a tariff peace deal between Canada and the U.S.
All of Canada’s political parties have promised to protect dairy farmers with tariffs so they can charge prices for their milk that reflect their production costs and provide a return on labour, management and investment.
But the fact remains that U.S. dairy farmers produce milk at prices almost a third less than Canadian prices.
Many dairy farmers on both sides of the border have quit the industry over the years, but the decline has been greater in the United States where larger dairy farms have emerged.
The U.S. has always tried to get through or around Canadian protections for its supply-managed dairy and poultry farmers, but Trump now has ratcheted up his pressure to put the dairy industry at the top of his demands.
In previous trade negotiations, Canada has conceded slices of the Canadian market by allowing limited volumes of dairy products to come in at relatively low tariffs. The U.S. and New Zealand have challenged the way Canada allocates those import volumes to importers.
Most have gone to Canadian dairy companies; New Zealand and the U.S. want the import rights to go to retailers and distributors without ties to the Canadian dairy industry.
