Why Canada's 270% Milk Tariff Irks Donald Trump: QuickTake

Canada’s protectionist dairy policies have once again incited the furor of U.S. President Donald Trump. As he departed a Group of Seven summit on June 8, Trump singled out Canada’s 270 percent tariffs on some dairy products, tweeting that they’re unfair to U.S. farmers. Yet American producers, who also benefit from subsidies and tariffs, exported about $227 million worth of dairy goods to Canada last year, resulting in a surplus of about $114 million. Trump’s latest rebuke comes amid escalating tensions between the U.S. and Canada. Dairy could even become another issue in negotiations over a new North American Free Trade Agreement.

The government-owned Canadian Dairy Commission in 2017 rolled out a new policy that made it cheaper for Canadian processors to buy domestic supplies of ultra-filtered milk, which is used in cheese and yogurt. As a result, some U.S. dairy companies, mostly in New York and Wisconsin, say they’ve lost all their Canadian sales of that product. Trump called that pricing policy “a disgrace." Now he’s turned to a related topic, the tariffs that kick in when Canada’s import quotas are filled. On June 8 he wrote on Twitter: "Canada charges the U.S. a 270% tariff on dairy products! They didn’t tell you that, did they? Not fair to our farmers!" (Though lower tariff rates apply to some dairy products, the rate for over-quota ultra-filtered milk and other "milk protein substances" is indeed 270 percent.)