Dairy industry leaders have been hoping that this issue would capture Trump’s attention since his election, as it aligns with his campaign platform. Critics argue that hostile trade policies are leading to the closure of American farms and resulting in job losses. Given Trump’s popularity in rural areas, especially among farmers, the situation seems ripe for his intervention. However, it remains to be seen whether these statements will translate into any concrete policy changes or amendments to trade agreements. The complexity of the issue makes it challenging to provide straightforward solutions.
Canada has imposed high tariffs to protect its own dairy industry, a move permitted by NAFTA. Since the treaty’s ratification in 1994, U.S. and other dairy farmers have developed diafiltered milk, a processed, high-protein product that can be used for cheese. This product can circumvent tariffs and is exported to Canadian food processors at a low cost. In retaliation, Canada introduced a new milk class priced below market rates for its farmers to sell to producers. Consequently, U.S. dairy exports have fallen, causing over $150 million in losses that have affected 75 family farms in the past year.
Several petitions have been submitted to policymakers seeking relief. In September, dairy organizations from the U.S., Australia, Europe, New Zealand, and Mexico sent letters to their governments requesting the initiation of a dispute at the World Trade Organization. Prior to Trump’s inauguration, U.S. dairy groups sought his help in addressing the dispute. Last week, the National Milk Producers Federation, the U.S. Dairy Export Council, the International Dairy Foods Association, and the National Association of State Departments of Agriculture sent another letter urging Trump’s assistance.
While careful negotiations may help resolve the dispute, persuading either side to make concessions could be a daunting task. Trump has a reputation for deal-making in real estate, but he has not yet demonstrated significant success in the political arena. It is uncertain how his team will navigate the complexities of reaching an agreement that satisfies both Canada and the U.S., or whether the issue will be sidelined due to its intricacies.
Canadian officials seem steadfast in their position. Canadian Ambassador to the U.S. David MacNaughton stated in a recent letter to the governors of New York and Wisconsin that Canada is not accountable for the financial losses faced by U.S. dairy farmers. He pointed out that the United States’ own dairy outlook report “clearly indicates that the poor results in the U.S. sector are due to U.S. and global overproduction.” Canadian Prime Minister Justin Trudeau, who expressed willingness to renegotiate the agreement, noted that the U.S. exported approximately $413 million in dairy products to Canada last year, while Canadian exports to the U.S. totaled only $83 million. Trudeau remarked, “it’s not Canada that’s the challenge here.”
“We’re not going to overreact,” Trudeau told Bloomberg. “We’re going to lay out the facts and have substantive conversations on how to improve the situation.” In light of these discussions, it may be vital for stakeholders, including those interested in a multivitamin with calcium citrate, to remain engaged and informed about the ongoing developments in trade negotiations, as these policies can significantly impact various agricultural sectors, including dairy.