Supply management enters Canada-U.S. trade dispute
Trump Commerce Secretary pick on Wednesday said Canada treats U.S. dairy producers 'horribly'
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OTTAWA — Trump’s pick for the new U.S. Commerce Secretary says Canada’s dairy industry is “unfair” to American producers, and one advocacy group agrees.
On Wednesday, incoming U.S. Commerce Secretary Howard Lutnick told the U.S. Senate confirmation committee that current trade agreements concerning the North American dairy industry unfairly target U.S. producers.
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“Canada treats our dairy farmers horribly, that’s got to end,” he told Wisconsin Senator Tammy Baldwin during the hearing. “I’m going to work hard to make sure, as an example for your dairy farmers, they do much, much better in Canada than they’ve ever done before.”
On Wednesday, the Consumer Choice Center (CCC) issued a statement agreeing with that sentiment, saying that while Trump’s 25% tariff threats are “nonsensical,” so is Canada’s supply management system that imposes tariffs of up to 300% on imported dairy.
“There is a strong argument to get rid of supply management without the current conversation about our trading relationship with the United States,” said David Clement, CCC’s North American affairs manager.
“It artificially inflates prices for Canadian families and core staple food items, so that, in and of itself, the justification to get rid of it, but in the context of trade, this is something that the first Trump administration had grievances about.”
The council maintains Canadians consistently pay between 20 and 30% more for milk than Americans do, adjusted for exchange, and that when it comes to dairy access, Lutnick is right to point out Canada is neither a reasonable or responsible trading partner.
Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, told the Toronto Sun that while he believes supply management will be on Trump’s radar, it’ll be used more as a tool for political posturing.
“We’re only 41 million people, we can only drink so much milk,” he said.
“Is our market that interesting? Not necessarily. I think it’s more about principles, supply management will be used, yet again, as a bargaining chip to gain on other threats.”
Charlebois also took issue with Lutnick ‘s assertion that Canada treats U.S. dairy farmers poorly.
“I don’t think we treat them at all,” he said.
“With tariffs, America doesn’t exist, really — so I don’t think we’re treating them badly, we just basically consider America to be non-existent.”
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Instead of doing away with supply management, Charlebois said it needs to be properly reformed, and for the right reasons.
“I know a lot of Canadians think things will get cheaper if you get rid of supply management. There’s no evidence of that,” he said, explaining that while prices may fall short term, other countries who’ve done this saw prices eventually increase after five years.
“We’ve got to be careful,” Charlebois warned.
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