US dairy industry backs Trump in Canada tariffs row

Two US dairy-industry bodies have praised President Trump for "standing up" for the sector in the trade dispute between the country and Canada.

A 50% tariff from the US on goods from Canada, including alcohol and dairy products, came into force over the weekend, after both countries failed to reach a deal.

On Saturday (22 August), Canadian Prime Minister Mark Carney said his country "will match Washington's new tariffs dollar for dollar".

In his statement, Carney said: "While we believed, earlier this week, that we were moving toward a mutually beneficial agreement, in recent days, the US proposed new terms that were uneconomic, unfair and undermined the net benefits to Canada, calling into question the reliability of any deal.

"In short, they asked too much and offered too little. More fundamentally, the cumulative effect of US demands revealed the limits of their commitment to a true economic partnership. As a result, last evening, I suspended trade negotiations with the US and directed Canada's negotiators to return to Ottawa. They worked hard, in good faith, to the last minute to defend the interests of Canadians."

Last week, the US had delayed introducing the new tariffs on a range of Canadian goods by three days, after Trump said the two countries had reached a deal.

However, in a social media post on Truth Social over the weekend, President Trump said: "Canada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!"

In a joint statement, The National Milk Producers Federation (NMPF) and US Dairy Export Council (USDEC) outlined their "strong appreciation" for the Trump administration's efforts to resolve "concerns" the industry has over the US-Mexico-Canada Agreement (USMCA) and access to the Canadian dairy market.

"We appreciate the administration's persistence in standing up for American dairy producers and exporters who have waited far too long for Canada to live up to its promises," Krysta Harden, the president and CEO of USDEC, said. "Canada has had plenty of chances to fix its unfair market access practices and close the loopholes it's used to dodge its dairy commitments under USMCA. This weekend's action makes clear that patience has run out."

Gregg Doud, the president and CEO of NMPF, said Trump's announcement "sends an unmistakable message that Canada's ongoing disregard for its USMCA dairy commitments carries real consequences".

Doud added: "It's time for Canada to stop looking for workarounds and instead sit down in good faith to resolve these outstanding USMCA dairy implementation issues. Canadian retaliation would only serve to force the United States' hand in escalating its leverage. The objective should be for both our countries to prevent increased friction and build on the progress made through weeks of negotiations."

The Toasts not Tariffs Coalition, which is made up of 59 US bev-alc associations, said it recognised Trump's efforts to try to motivate Canadian provinces to bring back US alcohol to their shelves but added: "A 50% tariff on Canadian spirits, wine and glass bottles will also have consequences for US hospitality businesses."

The coalition said: "We urge leaders in both countries to resolve this dispute quickly, secure the return of US wine and spirits across Canada, and avoid further actions that increase costs and uncertainty for hospitality businesses and the consumers they serve."

The White House announced last month the tariffs would be imposed in response to what the administration described as Canada's "discriminatory treatment" of US products.

Affected products include spirits, wine, beer and cider, as well as dairy goods such as milk, cream, dried whey and whey protein concentrates.

Chris Swonger, the president and CEO of the Distilled Spirits Council of the US, has also called for officials to return to the negotiating table.

"We encourage policymakers on both sides of the border to pursue a negotiated solution that restores market access for US spirits throughout Canada and returns spirits trade to a zero-for-zero tariff framework," he said.

He added: "We appreciate the administration's recognition that American distillers have been unfairly targeted by these Canadian provincial sales bans.

"It is unfortunate that the Canadian provinces' continued refusal to return US spirits products to store shelves has led to this outcome."

Canadian provinces including Ontario and Quebec started pulling US alcohol from their shelves in March last year as a response to US tariffs on Canadian goods.

Cal Bricker, the president and CEO of Spirits Canada also said: "The dust is still settling on all of this. What I can say is that we are encouraging governments on both sides of the border to return to a pre-tariff environment as soon as possible.

"Canada distills about $2billion in spirits a year with a billion of that being sold in the US. Obviously, the tariffs now being imposed on our business could have a severe impact."

In a note to clients on Friday, TD Cowen analyst Robert Moskow said the breakdown in talks between the US and Canada symbolises "a modest challenge for Diageo's Canadian whiskey".

He said the new tariff "creates an incremental cost pressure" for Diageo's Canadian whiskey brand Crown Royal, a brand the spirits giant is already looking to revitalise.

Moskow added the lack of a new trade deal between Canada and the US "also makes it unlikely that American whiskey will return to provincial liquor store shelves in Canada, which is a negative for Brown-Forman".

"US dairy industry backs Trump in Canada tariffs row" was originally created and published by Just Food, a GlobalData owned brand.