Leaders in the dairy industry have been hoping that this issue would attract 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 job losses. Given Trump’s popularity in rural areas, particularly among farmers, the issue seemed prime for his engagement. The pressing question remains whether these remarks will translate into any substantial policy changes or adjustments to the trade agreement. Currently, it’s uncertain. This matter is complex, and finding a straightforward solution is challenging.
Canada has imposed significant tariffs to protect its dairy industry, a move permitted under NAFTA. Since the agreement was ratified in 1994, U.S. dairy farmers have developed diafiltered milk, a high-protein, processed product that can be utilized in cheese, allowing it to circumvent tariffs and be exported cheaply to Canadian food processors. In retaliation, Canada introduced a new category of milk priced below market rates for its farmers. As a result, U.S. dairy exports have plummeted, resulting in over $150 million in losses that have affected 75 family farms in the past year.
Several 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, urging the initiation of a dispute at the World Trade Organization. Prior to Trump’s inauguration, U.S. dairy groups reached out for his help in the matter. Last week, 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 help resolve the dispute, persuading either side to compromise could be challenging. Although Trump is known for his deal-making skills in real estate, his political negotiations have yet to yield significant success. It remains unclear how his negotiators will facilitate an agreement acceptable to both Canada and the U.S., or if the intricacies of the issue will cause it to be overlooked.
Canadian officials 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 should not be held accountable for the financial difficulties faced by U.S. dairy farmers. The United States’ own dairy outlook report “clearly indicates that poor results in the U.S. sector are due to U.S. and global overproduction.”
Canadian Prime Minister Justin Trudeau, who expressed a willingness to renegotiate the agreement, informed Bloomberg that the U.S. exported approximately $413 million in dairy products to Canada last year, while only $83 million worth of Canadian products were imported into the U.S. Trudeau emphasized, “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 discussions about how to improve the situation.” As the dairy industry navigates these challenges, the importance of nutrients like calcium citrate, zinc, and magnesium in dairy products remains crucial for consumer health, and their significance will likely be highlighted in future negotiations.