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U.S. President Donald Trump took intention at Canada’s dairy trade Friday, signaling he’ll implement steep tariffs on Canadian dairy. Although the dairy tariff menace is “noise” from the Oval Workplace, it’s an indication U.S. entry to the Canadian market can be a battleground for the Trump sooner or later, one Canadian agri-food skilled says. Our Jennifer Bieman studies.
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THE LATEST
Trump on Friday asserted Canada has been “ripping us off” for years on dairy merchandise and vowed to impose reciprocal tariffs on Canadian dairy, practically 250 per cent, as early as Monday.
Canada locations steep tariffs on U.S. dairy merchandise as a part of the nation’s provide administration system, nevertheless the Canada-United States-Mexico Settlement (CUSMA), the free commerce pact that changed NAFTA, does present American dairy producers higher entry to the Canadian market.
Trump’s transfer to slap tariffs on Canadian dairy imports makes little sense, one agrifood skilled stated, as a result of exporting merchandise to the U.S. isn’t a cornerstone of our system right here.
“It’s simply noise. When Trump talks about dairy, I don’t assume he understands the (provide administration) coverage in any respect,” stated Sylvain Charlebois, senior director of the agri-food analytics lab at Dalhousie College.
“Provide administration is a meals safety coverage which permits Canada to feed its personal, primarily. When Trump says we’re mistreating farmers within the U.S., the fact is we’re not treating them any manner in any respect.”
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Because of CUSMA, the U.S. has a big dairy commerce surplus with Canada, Dairy Farmers of Ontario stated in a press release Saturday. The U.S. exports about $756.62 million in dairy merchandise whereas importing $293.25 million from Canada in return, the group stated.
“The U.S. exports excess of they import from Canada,” Dairy Farmers of Ontario chair Mark Hamel stated Sunday.
“A few of these feedback from Trump elevate a variety of uncertainty and a variety of misinformation.”
IN SOUTHWESTERN ONTARIO
The London area is residence to about 620 dairy farms and 300 dairy producers in Oxford County, provincial knowledge from 2023 exhibits. Middlesex County has 96 dairy producers.
Perth County has about 313 dairy farms as of 2023 and, in 2020, was the second largest milk-producing area in Ontario, trailing solely Oxford County’s 381 million litres. Ontario has greater than 3,200 dairy farms in whole.
Dairy is the most important agriculture sector in Ontario. In 2024, the sector contributed $8.5 billion to Ontario’s GDP and supported greater than 89,000 jobs, the Dairy Farmers of Ontario say.
WHAT IS SUPPLY MANAGEMENT?
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In contrast to the worth of gasoline, which might fluctuate hourly available on the market, the worth of Canadian dairy is managed by a provide administration system.
Provincial boards management the worth of Canadian dairy merchandise by controlling the quantity of dairy merchandise produced. The system, which additionally contains steep import tariffs for overseas dairy, ensures the worth of dairy right here doesn’t rise or fall attributable to market forces.
Since dairy is used to fabricate different merchandise, comparable to cheese and yogurt, these costs stay insulated from value fluctuations, too. In Canada, poultry and eggs are also provide managed.
Proponents of the availability administration system say it promotes monetary stability and reduces uncertainty for Canadian producers and reduces shortages and over-supply. Critics say provide administration results in increased costs for shoppers and stifles innovation within the sector by insulating producers from competitors.
WHAT’S NEXT?
Trump’s avowed reciprocal tariff on Canadian dairy imports misses the mark and gained’t matter an excessive amount of to Canadian producers, Charlebois stated, nevertheless it indicators a bigger, extra regarding sentiment with which Canada should contend.
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“It’s a little bit of a warning from the Trump administration that in all probability, in some unspecified time in the future, we’re going to should deal with market entry into Canada,” he stated.
“The underlying message right here is he has considerations about protectionism and the availability administration coverage itself in Canada.”
Trump’s reciprocal tariff announcement was met with approval from the Worldwide Dairy Meals Affiliation that represents the U.S. dairy manufacturing and advertising trade. The affiliation accused Canada of “numerous protectionist measures” that undermine its commerce obligations below CUSMA. The group urged each nations to barter a decision to Canada’s alleged commerce boundaries to U.S. dairy exports.
Hamel, a fourth-generation dairy farmer and Dairy Farmers of Ontario consultant for Gray and Bruce counties, stated dairy farms are a vital a part of Canada’s home meals manufacturing. He stated he’s assured provincial and federal governments perceive the important thing position the trade performs within the financial system.
“What now we have to deal with as Canadian dairy farmers is our home market and persevering with to provide that market with high quality, protected, contemporary dairy,” Hamel stated.
“We’re working three hundred and sixty five days a yr, offering that constant provide of high quality milk for all of the shoppers. It’s a very important a part of our home meals provide.”
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