Trump’s Misleading Claim on Canadian Dairy Tariffs

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To enactment his program to summation tariffs, President Donald Trump has repeatedly said that the Canadian authorities charges U.S. farmers a 250% oregon 270% tariff connected dairy products exported to Canada. That’s misleading. There are rates that precocious connected the books, but they would lone beryllium charged if U.S. exports transcend predetermined tariff complaint quotas, which the dairy exports don’t travel adjacent to meeting. 

Below these quotas, American dairy income to Canada look zero tariffs. The United States–Mexico–Canada Agreement, or USMCA, a commercialized statement negotiated by the archetypal Trump administration, had raised the thresholds for the protectionist tariffs. Some American manufacture stakeholders reason that Canadian regulations impede the United States’ quality to scope these quotas, but U.S. dairy has ne'er faced triple-digit tariffs.

During an interview with Sharyl Attkisson of Sinclair that aired on March 16, Trump claimed, “Nobody says that with Canada, that they charge, our farmers – deliberation of this. They person for dairy products, immoderate dairy products, 270% tariff. Nobody knows that.” He continued, “So we privation to merchantability beverage into Canada, and they propulsion a 270% terms summation connected the milk.”

Trump has repeatedly made similar claims regarding Canadian tariffs connected U.S. dairy exports.

On astatine slightest two occasions, helium has wrongly claimed that the Biden medication had allowed the tariffs to increase. “In Canada, we find that they’re charging america implicit 200% for dairy products. You cognize astir that. And erstwhile I left, we had that good taken attraction of, but nether Biden they conscionable kept raising it — precise hard to woody with the Canadian representatives, 250 percent for dairy products, tariff,” Trump said during a treatment with reporters successful the Oval Office on March 7. The over-quota rates connected dairy exports to Canada arsenic of January 2025 are virtually identical to the past twelvemonth of Trump’s archetypal word successful bureau in 2020. 

In 2024, the U.S. exported much than $1.1 cardinal successful dairy products to Canada, a astir 55% summation successful exports since 2020. None of it was taxable to triple-digit Canadian tariffs. Canada is the second-largest planetary recipient of U.S. dairy behind Mexico. 

We reached retired to the White House astir the president’s claims but did not person a response.

Trump has implemented oregon threatened galore tariffs targeting Canadian goods, and the administration’s monthlong hold of its announced 25% tariff connected galore Canadian and Mexican imports is acceptable to expire connected April 2 — the aforesaid time that the medication plans to use reciprocal tariffs to lucifer the duties charged by different nations for U.S. exports.

High Tariffs Only Enforced implicit Quota Thresholds

The maximum tariff rates for aggregate U.S. dairy products exported to Canada bash attack oregon transcend the 250%-270% range. For example, as of Jan. 1, the maximum Canadian import tariff was 245.5% for food and curd, 298.5% for butter, and 241% for liquid milk. 

However, Trump failed to notation that these ample tariffs are levied lone if U.S. dairy exports transcend a predetermined quota.

Chuck Nicholson, subordinate prof successful the section of cultivation and applied economics astatine the University of Wisconsin-Madison, explained to america successful an email that “both the US and Canada usage a strategy of tariffs for dairy products that includes 2 elements, ‘Tariff Rate Quotas’ (TRQs) and ‘Over-Quota Tariffs.’” He continued, “TRQs bespeak an magnitude of merchandise that tin participate the state astatine debased tariff rates (or, successful the lawsuit of US dairy products to Canada, mostly zero tariffs).”

The tariff schedule published by the Canada Border Services Agency shows that for astir each dairy products, American producers are afloat exempted from paying tariffs truthful agelong arsenic the quantity of exports remains beneath the quota (this is denoted by the statement “UST” nether the “Applicable Preferential Tariffs” file successful the document). 

Nicholson told america that the Canadian authorities implemented import quotas to summation the competitiveness of the nation’s home dairy manufacture done a supply absorption system. By limiting dairy imports done quotas, the Canadian authorities aids home producers by expanding minimum dairy prices. Kirsten Hillman, the Canadian ambassador to the U.S., told CBS News connected March 9 that the quotas question to “protect our farmers and families.”  

As we’ve explained before, tariffs are customs duties paid by home importers — successful this case, Canadian processors, distributors and retailers purchasing American dairy products. Therefore, Nicholson told america that over-quota tariff rates successful the triple digits guarantee that American imports enactment beneath the quotas.

Nicholson besides noted that “the US has a akin strategy of commercialized extortion for dairy products, albeit with mostly little Over-Quota Tariff rates.” For example, helium told america that portion food imported from Canada to the U.S. faces nary tariffs nether a predetermined quota threshold, it is taxable to over-quota tariffs of astir 24%, oregon up to 39%.

The existent tariffs and quotas for the dairy manufacture were enactment successful spot by the USMCA — a commercialized statement that Trump negotiated and signed into instrumentality successful 2020. The USMCA replaced the North American Free Trade Agreement, oregon NAFTA.

We previously fact-checked Trump successful 2020 erstwhile helium falsely claimed successful October of that twelvemonth that the USMCA “got escaped of the tariffs” connected American dairy products exported to Canada. As we explained then, portion the USMCA raised quota thresholds for galore dairy exports, it did not region specified quotas. 

It is worthy noting that the TRQs connected American dairy products are an objection alternatively than the norm. The USDA website states that nether some the USMCA and NAFTA, “almost each cultivation products traded betwixt the United States and Canada” look nary tariffs oregon quotas. 

U.S. Dairy Exports Do Not Meet Tariff Quotas

Currently, American producers bash not export capable dairy to conscionable Canadian tariff complaint quota thresholds. Therefore, Al Mussell, probe pb and laminitis of the Canadian probe enactment Agri-Food Economic Systems, told CNN that “in practice, these tariffs are not really paid by anyone.”

The International Dairy Foods Association, a lobbying radical that advocates connected behalf of the U.S. dairy industry, said successful a March 7 statement that “the U.S. has ne'er gotten adjacent to exceeding our USMCA quotas.”

The IDFA sent america calculations based connected Canadian utilization data that identified the proportionality of each dairy product’s yearly tariff quota met frankincense acold by U.S. exporters, besides known arsenic the “fill rate.” In an email response, IDFA explained that Canadian tariff quotas measurement imports connected either a calendar twelvemonth ground oregon a “quota year” ground that ends connected July 31. According to the IDFA’s calculations, astatine the extremity of 2024, the mean capable complaint for dairy products taxable to a calendar twelvemonth tariff quota was lone 26.72%. For dairy products taxable to a quota twelvemonth tariff, the mean capable complaint arsenic of March 2025 was lone 21.24%.

Trump besides claimed during the March 16 interview that Canada enacts “a batch of non-monetary tariffs” that restrict U.S. dairy exports. It’s existent that the U.S. dairy lobby has expressed galore grievances regarding Canadian commercialized policy.

The U.S. lobby says that Canadian dairy processors usage up overmuch of the quotas by buying products from their ain dairy operations based successful the U.S. “Canadian companies connected some sides of the border” assertion shares of the American import quota, Matt Herrick, the IDFA’s enforcement vice president, told america successful an email. “Canada is preserving astir shares of their TRQs for Canadian processors, causing capable rates to stay debased crossed respective dairy merchandise categories.” 

The IDFA also opposes other regulations enacted by the Canadian government, specified arsenic pricing policies for dairy proteins and compositional standards for cheese.

Becky Rasdall Vargas, elder vice president of commercialized and workforce argumentation astatine the IDFA, told Farm Progress that these regulations forestall American producers from exporting arsenic overmuch dairy to Canada arsenic they would like. She explained, “Our ailment is we’re not capable to get anyplace adjacent [the quota] cap, adjacent though we person buyers who archer america they would similar to bring successful our product.”

Elaborating connected this argument, economists based successful Canada and the U.S. explained successful a 2023 article for a University of California publication, “The United States believes that Canada violated the USMCA by giving astir of the TRQ allocation to Canadian processors and thereby reducing U.S. entree to Canadian retail markets.” They explained, “Canada presently allocates 85%–100% of the TRQs to home processors connected a market-share basis, depending connected the benignant of dairy product. As a result, the processors mostly import dairy products that indispensable acquisition further processing earlier they are acceptable for retail sale.”

In December 2021, a USMCA quality colony sheet ruled successful favour of the U.S. dairy manufacture connected this matter. After Canada subsequently implemented changes, different ruling by a USMCA sheet successful November 2023 recovered that the nation’s updated policies were permissible nether the commercialized statement and could continue. The IDFA and some lawmakers support that Canada continues to interruption the USMCA done its dairy policies. 

Ultimately, the economists penning for the University of California work concluded that the U.S. dairy industry’s concerns regarding violations of the USMCA person small real-world effect connected the American dairy industry. “If Canada were to alteration their TRQ allocation strategy to afloat align with the petition from the United States, not overmuch would alteration regarding the constitution of Canadian dairy imports,” they wrote.

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The station Trump’s Misleading Claim connected Canadian Dairy Tariffs appeared archetypal connected FactCheck.org.