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5d ago

Canada Locks in Dairy Protections as Trump Threatens 35% Tariffs

Experts caution targeted reforms could be necessary to clinch a U.S. trade deal despite the new supply management law

Holstein dairy cows are pictured at the Armstrong Manor Dairy, in Caledon, Ont., in January 2025. U.S. President Donald Trump has taken aim at dairy — and Canada's supply management program as a whole — many times before. But dairy farmers worry that their industry could be hit hard if supply management becomes a concession.
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Dairy cows on a farm in B.C. on December 19, 2024.

Overview

  • In a Truth Social letter on July 11, President Trump warned he would impose 35 percent tariffs on all Canadian imports starting Aug. 1 and explicitly criticized Canada’s dairy levies.
  • Parliament’s Bill C-202, enacted in late June, now bars negotiators from offering any new market access or tariff reductions on dairy, poultry and eggs.
  • Ottawa maintains that supply management is off the table even as economists and trade specialists say limited concessions may be needed to meet the July 21 negotiation deadline.
  • Dairy farmers report growing anxiety and “Groundhog Day” fatigue over repeated U.S. tariff threats that could eventually force policy shifts.
  • Analysts outline a 15- to 20-year “Supply Management 2.0” road map featuring quota buybacks, national allocations, Canadian Dairy Commission reforms, phased tariff cuts and export quotas, with buyout costs potentially exceeding $20 billion.