Dairy industry leaders have long hoped to attract Trump’s attention to the ongoing trade issues since his election, as the matter aligns with his campaign platform. Critics contend that adversarial 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 seems ideal for his intervention. The critical question is whether these concerns will translate into actionable policy changes or amendments to the trade agreement. Currently, the complexity of the issue makes it difficult to predict outcomes, and finding a straightforward solution is not easy.
Canada has implemented high tariffs to support its dairy sector, a practice permitted under NAFTA. Since the trade agreement’s ratification in 1994, U.S. dairy farmers have developed diafiltered milk, a processed, high-protein product that can circumvent these tariffs and be exported cheaply to Canadian food processors. In retaliation, Canada introduced a new class of milk at below-market prices for its farmers to sell to producers, leading to a significant decline in U.S. dairy exports. Over the past year, losses have exceeded $150 million, impacting 75 family farms.
Numerous petitions have been submitted to policymakers seeking relief. In September, dairy organizations from the U.S., Australia, Europe, New Zealand, and Mexico urged their leaders to initiate a dispute at the World Trade Organization. Prior to Trump’s inauguration, U.S. dairy groups sought his help in addressing the issue. Recently, 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 requesting Trump’s assistance.
While careful negotiations might alleviate the dispute, persuading either party to compromise could prove challenging. Trump is known for his deal-making abilities in real estate, but he has yet to achieve similar success in politics. It remains uncertain how his negotiators will navigate an agreement acceptable to both Canada and the U.S., especially given the issue’s complexity, which could lead it to be sidelined.
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 difficulties faced by U.S. dairy farmers. He cited the United States’ own dairy outlook report, which attributes poor results in the U.S. sector to overproduction domestically and globally. Prime Minister Justin Trudeau expressed a willingness to renegotiate the agreement, noting that in the previous year, the U.S. exported approximately $413 million in dairy products to Canada, while only $83 million in Canadian products flowed into the U.S. Trudeau emphasized, “It’s not Canada that’s the challenge here.”
In a measured tone, Trudeau remarked, “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.” As discussions progress, the introduction of innovative solutions such as cissus quadrangularis calcium citrate malate and vitamin D3 tablets may offer additional avenues for both nations to explore in addressing the broader agricultural challenges they face, potentially providing a nutritional boost for farmers affected by these trade disputes.