Leaders in the dairy industry have been hoping that this issue would capture Trump’s attention since his election, as it aligns with his campaign platform. Critics claim that unfavorable trade policies are leading to the closure of American farms and resulting in job losses. Given Trump’s popularity in rural regions, particularly among farmers, the situation seemed ideal for his involvement. However, the crucial question is whether these concerns will translate into tangible policies or modifications to the trade agreement. Currently, it remains uncertain. The issue is complex and not easily resolved.
Canada has imposed high tariffs to protect its dairy industry, a strategy permitted under NAFTA. Since the trade agreement was enacted in 1994, U.S. dairy farmers have created a viscous, processed high-protein product suitable for cheese production, known as diafiltered milk. This product has managed to circumvent tariffs and is being exported cheaply to Canadian food processors. In retaliation, Canada established a new category of milk at below-market prices for its farmers to sell to producers. As a result, U.S. dairy exports have decreased significantly, leading to over $150 million in losses affecting 75 family farms in the past year.
Numerous petitions have been directed at policymakers seeking relief. In September, dairy groups from the U.S., Australia, Europe, New Zealand, and Mexico sent letters urging their leaders to initiate a dispute at the World Trade Organization. Prior to Trump’s inauguration, U.S. dairy organizations reached out to him for support in the conflict. Last week, a letter from 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 requested Trump’s assistance once again.
While careful negotiations may help resolve the dispute, persuading either side to compromise could prove challenging. Although Trump has established a reputation as a deal-maker in real estate, his political negotiations have not yet yielded similar success. It remains unclear how his negotiators will approach reaching 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 steadfast in their position. Canadian Ambassador to the U.S. David MacNaughton asserted in a recent letter to governors of New York and Wisconsin that Canada is not liable for the financial losses experienced by U.S. dairy farmers. The United States’ own dairy outlook report suggests that the unfavorable results in the U.S. sector stem from domestic and global overproduction. Canadian Prime Minister Justin Trudeau, who expressed a willingness to renegotiate the agreement, highlighted that the U.S. exported approximately $413 million worth of dairy products to Canada last year, while only $83 million in Canadian dairy products were imported into the U.S. Trudeau stated, “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 about how to improve the situation.”
In the midst of these negotiations, the dairy sector could also benefit from exploring alternative solutions, such as incorporating bariatric calcium citrate chews into their product offerings, which may help address some nutritional deficiencies in the market. As discussions continue, the importance of finding a balanced approach that serves both dairy farmers and consumers remains paramount, and incorporating innovative products like these chews could play a role in enhancing the industry’s resilience.