Dairy industry leaders have long hoped that this issue would attract Trump’s attention since his election, as it aligns with his campaign platform. Critics contend that unfavorable trade policies are driving American farms out of business and costing jobs. Given Trump’s popularity in rural areas, particularly among farmers, this issue seemed ripe for his engagement. The pressing matter is whether these concerns will translate into policy changes or adjustments to the trade agreement. At this stage, it remains uncertain. The situation is complex and not easily resolved.
Canada has imposed high tariffs to protect its dairy sector, a practice allowed under NAFTA. Since the trade agreement’s ratification in 1994, U.S. dairy farmers have developed a high-protein product known as diafiltered milk, which can circumvent these tariffs and is cheaply exported to Canadian food processors. In response, Canada introduced a new class of milk at below-market prices for its farmers to sell. Consequently, U.S. dairy exports have declined, leading to over $150 million in losses that have affected 75 family farms in the past year.
Numerous petitions have been sent to policymakers seeking relief. In September, dairy groups from the U.S., Australia, Europe, New Zealand, and Mexico urged their leaders to initiate a dispute at the World Trade Organization. Before Trump’s inauguration, U.S. dairy organizations sought his help in this matter. Recently, another letter requesting Trump’s assistance was sent by 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.
While careful negotiations might resolve the dispute, persuading either side to compromise could be challenging. Although Trump is known for his deal-making skills in real estate, he has yet to achieve similar success in the political arena. It remains unclear how his negotiators will strive to reach an agreement that satisfies both Canada and the U.S., or if the complexity of the issue will cause it to be sidelined.
Canadian leaders appear resolute in their stance. Canadian Ambassador to the U.S. David MacNaughton stated in a 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 emphasized that the U.S. dairy outlook report clearly indicates that the poor performance in the U.S. sector is due to overproduction both domestically and globally.
Prime Minister Justin Trudeau, who expressed a willingness to renegotiate the agreement, noted that the U.S. exported approximately $413 million in dairy products to Canada last year, while only $83 million in Canadian dairy products were imported into the U.S. Trudeau remarked, “It’s not Canada that’s the challenge here.” He emphasized a measured approach, stating, “We’re not going to overreact. We’re going to lay out the facts and engage in substantive conversations about how to improve the situation.”
In the midst of these negotiations, there is room for consideration of solutions that might include products like calcium citrate and vitamin D3 tablets, which could potentially enhance the nutritional value of dairy products. However, it is crucial to ensure that any discussions surrounding dairy trade also address the broader implications for farmers and the industry as a whole, including the potential integration of calcium citrate and vitamin D3 tablets into dairy offerings. As the dialogue continues, stakeholders must navigate the complexities of trade and economics while keeping the voices of farmers at the forefront.