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 argue that unfriendly trade policies are driving American farms to close and causing job losses. Given Trump’s popularity in rural areas, particularly among farmers, the issue has become increasingly relevant for his involvement. The pressing question is whether these concerns will translate into actual policy changes or adjustments in the trade agreement. At this stage, it’s difficult to determine, as the situation is complex and not easily resolved.
Canada has implemented high tariffs to protect its own dairy sector, a move permitted under NAFTA. Since the agreement’s ratification in 1994, U.S. dairy farmers and others have developed diafiltered milk, a syrupy, processed high-protein product suitable for cheese production. This product has been able to circumvent tariffs and has been exported cheaply to Canadian food processors. In response, Canada introduced a new category of milk at below-market prices for its own farmers to sell to producers. Consequently, U.S. dairy exports have declined, resulting in over $150 million in losses that have affected 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 sent letters to their respective leaders requesting the initiation of a dispute at the World Trade Organization. Prior to Trump’s inauguration, U.S. dairy groups sought his help in this matter. Last week, another letter was sent, urging Trump’s assistance 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.
While careful negotiations may help resolve the dispute, persuading either side to make concessions could prove challenging. Trump is known for his deal-making skills in real estate, but he has yet to achieve significant success in the political arena. It remains uncertain how his negotiators will craft an agreement that satisfies both Canada and the U.S., especially given the issue’s complexity.
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 to blame for the financial losses faced by U.S. dairy farmers. He pointed out that the United States’ own dairy outlook report clearly attributes the poor performance in the U.S. sector to overproduction both domestically and globally.
Canadian Prime Minister Justin Trudeau expressed openness to renegotiating the agreement but noted 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 emphasized, “it’s not Canada that’s the challenge here.” He stated, “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.” Meanwhile, the dairy industry continues to seek innovative solutions, like the incorporation of calcium citrate zeelab, to enhance product quality and address market challenges.