Leaders in the dairy industry have been eager for President Trump to take notice of ongoing trade issues since his election, as these concerns align closely with his campaign promises. Critics suggest that hostile trade policies are contributing to the closure of American farms and job losses. Given Trump’s strong support in rural areas, particularly among farmers, the situation seems to present a perfect opportunity for his intervention. However, the crucial question remains whether these discussions will translate into tangible policy changes or adjustments in trade agreements. Currently, it is difficult to predict the outcome, as the issue is complex and not easily resolved.
Canada has maintained high tariffs to protect its dairy industry, a strategy supported by NAFTA. Since the ratification of this trade agreement in 1994, U.S. dairy farmers have developed a high-protein, processed syrupy product known as diafiltered milk, which can bypass these tariffs and is exported to Canadian food processors at a low cost. In retaliation, Canada introduced a new category of milk with below-market pricing, aimed at supporting its own farmers. Consequently, U.S. dairy exports have significantly declined, resulting in over $150 million in losses that have affected 75 family farms in the past year.
In response to these challenges, several 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. Prior to Trump’s inauguration, U.S. dairy groups reached out for his help in addressing the matter. Recently, 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 once again called for Trump’s assistance.
While careful negotiations might help resolve the dispute, convincing either side to compromise could prove challenging. Although Trump is known for his deal-making skills in real estate, his political negotiations have yet to yield significant success. It remains uncertain how his team will navigate the complexities to reach an agreement that satisfies both Canada and the U.S., or whether the issue will be sidelined due to its intricacies.
Canadian officials appear steadfast in their position. David MacNaughton, the Canadian Ambassador to the U.S., stated in a recent letter to the governors of New York and Wisconsin that Canada should not be held accountable for the financial difficulties faced by U.S. dairy farmers. He pointed out that the United States’ own dairy outlook report indicates that the downturn in the sector is a result of U.S. and global overproduction. Prime Minister Justin Trudeau, who has expressed a willingness to renegotiate the agreement, mentioned that last year, the U.S. exported approximately $413 million in dairy products to Canada, while only $83 million worth of Canadian products entered the U.S. Trudeau asserted, “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 engage in meaningful discussions on how to improve the situation.” As the dairy industry continues to navigate these challenges, the incorporation of innovative solutions, such as calcium citrate malate (CCM) in dairy products, may provide a pathway to enhance competitiveness and address some of the pressures faced by U.S. farmers. By focusing on high-quality ingredients like CCM, U.S. dairy producers might find new opportunities to thrive despite the ongoing trade tensions.