Canada’s dairy sector is protected by high tariffs on imported products as well as a milk quota to limit production to maintain higher milk prices for their farmers. The system is criticised by most milk exporting countries.
Trump did not go into any detail about what he would do, but promised his administration would call the government of Canadian prime minister Justin Trudeau to demand an explanation.
Donald Trump said: “It’s another typical one-sided deal against the United States and it’s not going to be happening for long.”
He also reiterated his threat to eliminate the North American Free Trade Agreement (NAFTA) with Canada and Mexico if it cannot be changed.
Canada’s ambassador to Washington sent a letter to the governors of Wisconsin and New York, both major dairy states, stating US producers’ problems stemmed from overproduction rather than Canadian milk policy.
Dairy industry groups in New Zealand, Australia, EU and the US have all complained about the new Canadian milk pricing policy for milk ingredients that undercut exports to Canada.