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3mo ago

Canada Enshrines Dairy Tariff Protections as U.S. Trade Talks Resume

Experts are split on whether the government can use executive powers or new legislation to overturn the measure.

A Holstein cow stands in a pasture at a dairy farm near Calgary in an Aug. 31, 2016, file photo. THE CANADIAN PRESS/Jeff McIntosh
Holstein cows stand at a dairy farm in Saint-Blaise-sur-Richelieu, Quebec, Canada March 20, 2025. REUTERS/Graham Hughes/File Photo
Canadian dairy industry members say they're less worried about the threat of steep U.S. tariffs than they are over a looming battle over supply management in eventual free trade talks. A barn cat looks over at cows as they wait to be milked at a dairy farm in Granby, Que., Wednesday, Feb. 5, 2025. THE CANADIAN PRESS/Christinne Muschi

Overview

  • Bill C-202, enacted June 26, bars Canada’s foreign affairs minister from committing to higher duty-free quotas or lower tariffs on dairy, poultry and eggs in any trade agreement.
  • Ottawa repealed its 3% digital services tax to restart negotiations with President Trump, who had paused talks and threatened U.S. tariffs over the levy.
  • President Trump has publicly targeted Canada’s tariffs—exceeding 300% on imports above set quotas—as a top trade irritant and warned of reciprocal measures.
  • Legal experts caution that royal prerogative may let the executive bypass the statute and that Parliament could repeal or amend the bill if concessions become necessary.
  • Canada and the United States are pursuing a new economic agreement by July 21, with the dairy dispute as the chief outstanding hurdle.