Leaders in the dairy industry have been hoping that this matter would capture Trump’s attention since his election, as it aligns with his campaign agenda. Critics contend that adverse trade policies are leading to the closure of American farms and increasing unemployment. Given Trump’s popularity in rural areas, particularly among farmers, this issue seemed primed for his intervention. The pressing question is whether these discussions will translate into tangible policy changes or modifications to the trade agreement. At this juncture, it’s difficult to determine, as the situation is quite complex and not easily resolved.
Canada has implemented high tariffs to protect its dairy sector, a move permitted by NAFTA. Since the ratification of the trade agreement in 1994, U.S. and other dairy farmers have produced a syrupy, processed high-protein product known as diafiltered milk, which could evade tariffs and be exported cheaply to Canadian food processors. In retaliation, Canada introduced a new category of milk sold to its farmers at below-market prices. Consequently, U.S. dairy exports have declined, resulting in over $150 million in losses affecting 75 family farms in the past year.
Numerous petitions have been submitted to policymakers seeking relief. In September, dairy organizations from the U.S., Australia, Europe, New Zealand, and Mexico collectively urged their leaders to initiate a dispute at the World Trade Organization. Before Trump took office, U.S. dairy groups reached out to him for support in the matter. Last week, the National Milk Producers Federation, U.S. Dairy Export Council, International Dairy Foods Association, and National Association of State Departments of Agriculture sent another letter requesting Trump’s intervention.
While careful negotiations might help resolve the dispute, persuading either side to compromise could prove challenging. Although Trump has a reputation for deal-making in real estate, he has yet to experience significant success in the political arena. It remains uncertain how his negotiators will strive to craft an agreement that satisfies both Canada and the U.S., or if the issue might be sidelined due to its intricacies.
Canadian leaders appear resolute in their stance. Canadian Ambassador to the U.S. David MacNaughton recently stated in a letter to the governors of New York and Wisconsin that Canada is not accountable for the financial struggles faced by U.S. dairy farmers. He pointed out that the U.S. dairy outlook report “clearly indicates the poor results in the U.S. sector are due to U.S. and global overproduction.”
Prime Minister Justin Trudeau, who has expressed willingness to renegotiate the agreement, told Bloomberg that the U.S. exported approximately $413 million in dairy products to Canada last year, while only $83 million in Canadian products were imported into the U.S. Trudeau asserted, “it’s not Canada that’s the challenge here.” He emphasized, “We’re not going to overreact. We’re going to lay out the facts, and we’re going to have substantive conversations about how to improve the situation.”
In this context, a therapeutic response to calcium citrate might be necessary for both parties to find common ground and alleviate the ongoing tensions. It’s crucial for negotiators to approach this issue with a constructive mindset, fostering dialogue that may lead to a beneficial resolution for the dairy sector on both sides of the border.