U.S. President Donald Trump reiterated his criticism of Canada’s dairy tariffs on Friday, emphasizing that they can exceed 200% for products imported from the U.S. However, Trump overlooked a critical detail: these steep tariffs are only applied once the U.S. exceeds a specific quota of tariff-free dairy exports to Canada, a threshold the U.S. is not even close to reaching.
The Tariffs Aren’t Actually Paid
In reality, the high tariffs are rarely paid by anyone. As Al Mussell, an expert on Canadian agricultural trade, pointed out, the tariffs only kick in after the U.S. surpasses its allowed tariff-free dairy sales. According to industry sources, the U.S. has not even come close to hitting the permitted limits for dairy exports, especially in categories like milk.
Trump’s Misleading Claim
Trump also made an inaccurate claim that Canada raised its dairy tariffs under President Joe Biden. In fact, Canada did not raise its dairy tariffs under Biden’s administration. As both official Canadian records and industry groups confirm, these tariffs were unchanged after Biden took office. The tariffs Trump criticized on Friday were established under the United States-Mexico-Canada Agreement (USMCA), which he negotiated, signed in 2018, and often praised as the “best trade deal ever made.”
The USMCA’s Impact on Dairy Tariffs
Under the USMCA, Canada agreed to provide U.S. dairy farmers with greater access to its market. Specific annual quotas were set for U.S. exports in 14 dairy categories, including milk, cheese, butter, and ice cream. These quotas were designed to give U.S. farmers more opportunities to sell their products to Canada, with the volume increasing over time. However, Canada’s high tariffs remain for any U.S. dairy exports above the agreed quotas. The USMCA did not require Canada to lower these tariffs, which Trump had hoped to see reduced.
Misunderstanding the Tariff System
The tariff system works similarly on both sides of the border. In Canada, the U.S. faces high tariffs on dairy exports above the agreed-upon quotas, but this is no different from the U.S. system, where imports of dairy products are also subject to high tariffs once they exceed set limits.
Experts, like Mussell, have pointed out that while the Canadian tariffs are substantial (up to 298.5% for butter), they are only imposed once the agreed quota is exceeded. As of now, the U.S. is not even approaching the limit to trigger these tariffs.
U.S.-Canada Agricultural Trade
Contrary to Trump’s assertion that Canada doesn’t take U.S. agricultural products, Canada is, in fact, the second-largest market for U.S. agricultural exports. According to the U.S. Department of Agriculture, Canada purchased approximately US$28.4 billion worth of U.S. agricultural products in 2024. The U.S. is also the second-largest supplier of dairy to Canada, with exports valued at about US$1.1 billion in 2024—a figure that has steadily increased over the years.
The U.S. government also notes that most U.S. agricultural exports to Canada are not subject to tariffs, with the exception of certain products like dairy, eggs, and poultry, which are protected under Canada’s supply management system.
Conclusion
While Trump’s criticism of Canada’s dairy tariffs is not entirely unfounded, it fails to acknowledge the full context. Canada’s tariffs only apply once the U.S. surpasses its tariff-free quota, a threshold the U.S. has not reached. Additionally, contrary to Trump’s claim, Canada did not increase these tariffs under Biden’s administration. Furthermore, the U.S. continues to enjoy significant agricultural trade with Canada, especially in dairy, despite the protectionist policies in place.
