What U.S. President Donald Trump has to say about dairy tariffs,
U.S. farmers will be able to export more products before levies kick in
It was the only specific Canadian trade policy U.S. President Donald Trump talked about. And he talked about it over and over.
“You know, they have tariffs of almost 300 per cent on some of our dairy products, and we can’t have that. We’re not going to stand for that,” Trump said at the White House in August.
“They put tariffs on our dairy products going into Canada, almost 300 per cent. We can’t have that. Can’t have that,” Trump said at a campaign rally in Indiana in August.
“They cannot continue to charge us 300 per cent tariff on dairy products, and that’s what they’re doing,” Trump said at the White House in September. Guess what: Trump made a trade agreement that lets Canada continue to charge 300 per cent on these hefty tariffs.
The new United States-Mexico-Canada Agreement includes cuts to only two of Canada’s dairy-related tariffs, and the U.S. agreed to the same cuts in return: both sides will phase out tariffs on whey and margarine.
Canada’s tariffs of more than 200 per cent on various other dairy items — milk, cream, cheese, butter — will remain the same as they were, a Cana- dian government official confirmed on Thursday.
Trump did succeed in securing dairy concessions from Prime Minister Justin Trudeau. If the new agreement is approved, U.S. farmers will be allowed to sell a bigger quantity of their dairy products in Canada, up to 3.6 per cent of the Canadian dairy market, before those prohibitive tariff rates kick in.
That is not nothing. Canadian dairy farmers have been vocal in their displeasure about the increase in U.S. access. Trudeau met with industry representatives in Montreal on Thursday.
“If I was the Americans, I would say, ‘Look, we have more product that’s going in at lower tariff rates.’ And if I was the Canadians, I would say, ‘We protected supply management and kept the tariff rates high.’ And in fact both of those are true,” said Mike von Massow, a food economics professor at the University of Guelph.
Canada also secured dairy concessions.
In exchange for Canada giving the U.S. more access to the Canadian market, “the United States will provide reciprocal access on a ton-for-ton basis for imports of Canada dairy products,” the U.S. government acknowledged on its website.
Canada’s dairy tariffs vary by product. For many products, the tariffs are below 10 per cent until a certain threshold of imports is reached. After that amount, the hefty second-level tariffs kick in as a barrier.
Trump’s frequent talk about Canada’s dairy tariffs may have been more about scoring public points than about the actual negotiations. Trump began emphasizing the dairy tariffs this spring after Trudeau criticized his steel and aluminum tariffs.
The president seemed to deploy the dairy example to suggest Trudeau was being hypocritical.