Is Canada exploiting a dairy export loophole that could potentially destabilize the U.S. market? Senators Baldwin, Marshall, and Ernst seem to think so.
At a Glance
- Canada is accused by U.S. lawmakers of evading the USMCA and not providing fair market access to U.S. dairy producers.
- Senators Tammy Baldwin, Roger Marshall, and Joni Ernst sent a bipartisan letter urging action against Canada’s alleged evasion of USMCA guidelines.
- Canada is exporting dairy protein at artificially low prices, impacting global markets and U.S. dairy exports.
- U.S. is a leading global dairy producer; access to international markets is crucial, supporting over 3 million jobs.
Accusations Against Canada
Amidst ongoing trade uncertainties under the United States-Mexico-Canada Agreement (USMCA), U.S. senators accuse Canada of exploiting a loophole that threatens American market stability. This loophole reportedly allows Canada to export dairy proteins at reduced prices, thereby creating unfair competition for U.S. producers on a global scale. The allegations suggest that Canada is evading treaty obligations, failing to provide fair market access for U.S. dairy farmers.
The letter penned by Senators Tammy Baldwin, Roger Marshall, and Joni Ernst, calls for immediate government intervention to limit these detrimental impacts on U.S. dairy exports. The trio argues that Canada is manipulating its dairy market by reserving most Tariff Rate Quotas (TRQs) for Canadian processors, which restricts U.S. market access. This strategic move allegedly contravenes the spirit of the USMCA and underscores Canada’s alleged misuse.
Senators Demand Prompt Action
The senators’ plea arises amidst heightened trade tensions reflected in tit-for-tat tariff measures. Governments of both nations have levied tariffs, further amplifying the urgency for interventions that align with USMCA agreements. “Historically, Canada has failed to live up to its commitments to provide access to its market; this remains the case even with new provisions in the United States-Mexico-Canada Agreement (USMCA),” claim the senators in their letter to U.S. officials.
“For years, Canada has been skirting the rules and cheating American dairy farmers and businesses out of fair access to their market. We cannot miss this opportunity to help level the playing field, and I’m ready to work with President Trump to protect and grow Made in Wisconsin dairy and ensure fairness for our farmers,” – Tammy Baldwin
In the eye of the storm are the U.S. dairy producers—the backbone of an industry supporting over 3 million jobs. The letter underlined that Canada’s industry operates under stringent regulations, including production limits and pre-set prices, which further complicates the competitive landscape for U.S. producers. The senators call for addressing these trade issues in upcoming USMCA discussions to restore fairness to the playing field.
Call for Equitable Market Practices
The recent changes mandated by the USMCA were expected to bolster the U.S. dairy industry’s market access, yet senators claim Canada is not meeting its commitments. Reciprocal tariff measures only highlight the escalating trade tensions, with the U.S. imposing a 25% tariff on steel and aluminum imports and Canada announcing corresponding levies.
“In upcoming negotiations with your Canadian counterparts, particularly those regarding USMCA, we ask that you address these long-standing issues that harm the United States’ ability to export dairy products,” – Sens. Tammy Baldwin, D-Wis.; Roger Marshall, R-Kan.; and Joni Ernst, R-Iowa
In response to these ongoing issues, U.S. Senators Baldwin, Marshall, Amy Klobuchar, and Ernst have urged the Trump Administration to aggressively address the trade concerns affecting American dairy farmers. The senators’ letter implores the U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick, and the Department of Agriculture Secretary Brook Rollins to take decisive action in the impending trade talks to uphold fairness and compliance with international agreements.
