Nicolai Haugsted
Trump promised to defend US dairy but some producers are now losing Canadian customers.
Donald Trump has spent years presenting himself as a defender of American farmers against what he considers unfair foreign competition.
Dairy has occupied a particularly prominent place in that argument. Canada’s tightly controlled market and eye-catching tariff rates have repeatedly supplied Trump with ammunition as he argues that American producers are being treated unfairly.
Yet the latest chapter of the U.S.-Canada trade fight has produced an awkward consequence for that sales pitch.
Some American cheese producers say Canadian customers are disappearing, orders are being cancelled and retaliation from Ottawa is making access to a valuable export market considerably harder.
For Mateo Kehler, chief executive of Vermont’s Jasper Hill Farm, figuring out who benefits has become difficult.
“I can’t figure out who’s winning here,” Kehler told The Bulwark. “Everybody I know is losing.”
Trump’s favorite dairy number needs some context
Trump has repeatedly complained that Canada charges enormous tariffs on American dairy products, at various points putting the figure at roughly 250 percent or even 400 percent.
Rates that high do exist within Canada’s supply-management system, but they do not simply apply to every carton of milk or block of American cheese crossing the border.
Canada operates tariff-rate quotas under the United States-Mexico-Canada Agreement, meaning specified volumes can enter at much lower tariff rates before steep over-quota duties apply.
Trump’s own administration nevertheless argues that Canada has unfairly restricted U.S. access through the way those quotas are allocated. Washington imposed additional duties on certain Canadian dairy products this summer before escalating further in September.
American dairy producers, meanwhile, have historically sold substantially more to Canada than Canadian producers sell south of the border.
That makes a trade fight designed to improve access potentially painful if retaliation causes existing customers to walk away first.
Award-winning cheese meets a trade war
Jasper Hill Farm has discovered that problem firsthand.
The Vermont cheesemaker produces Winnimere, which recently took Best of Show at the American Cheese Society’s annual competition.
Awards, however, do not pay much attention to international borders. Tariffs do.
Kehler told The Bulwark that Canadian customers effectively vanished last year as tariffs, retaliatory measures and a broader Canadian backlash against American products took hold.
He does not blame the consumers.
“Honestly, if I were a Canadian consumer, I would not be buying anything from the U.S. either,” Kehler said.
“This is a time for resistance, and I applaud Canadians for voting with their dollars.”
His comments illustrate a problem tariffs alone cannot measure. Trade disputes can change consumer behavior as well as prices, particularly after political tensions become attached to the nationality of a product.
Canada has hit American cheese
Ottawa has now added another obstacle for U.S. producers.
Canada introduced a new package of retaliatory tariffs on September 8 after the United States imposed 50 percent duties on billions of dollars of Canadian goods. Canadian countermeasures cover products including dairy, steel, appliances and agricultural equipment.
Numerous categories of U.S. cheese are now subject to a 25 percent Canadian tariff, including cheddar, mozzarella, Gouda, Parmesan and several other varieties.
Whey and several other dairy categories face rates as high as 50 percent under the latest measures.
Washington has responded with escalation of its own.
Trump ordered certain Canadian dairy imports barred from the United States beginning September 29, after previously imposing additional duties on Canadian products. His proclamation accused Canada of maintaining discriminatory restrictions against U.S. dairy producers.
The administration has similarly moved against certain Canadian alcoholic beverages as part of the wider dispute.
Wisconsin producers are feeling it too
Vermont is apparently not alone.
Pete Hardin, longtime editor of Wisconsin dairy publication The Milkweed, told The Bulwark that two cheese-plant owners in Wisconsin had informed him that large Canadian orders were cancelled.
Hardin rejects the premise that Canada represents a major problem for American dairy.
“The notion that for dairy, Canada is a problem to the U.S. is a joke, in my opinion,” he said.
His assessment conflicts sharply with the Trump administration’s position.
The White House says Canada’s management of its dairy quotas discriminates against American cheese exporters and puts U.S. businesses at a disadvantage compared with competitors from other countries.
Canada disputes Washington’s characterization of the broader trade relationship and says its latest tariffs are retaliation for U.S. measures. Ottawa says the new countermeasures match American tariffs “dollar for dollar.”
