President Donald Trump said Friday that he could levy tariffs against Canadian dairy and lumber imports in the coming days, just a day after the president exempted a slate of Canadian goods from new 25% duties.
“They have a tremendously high tariff,” Trump told reporters in the Oval Office on Friday. “They make it impossible for us to sell them lumber or dairy products into Canada.”
Trump added that tariffs as high as 250% could be imposed on Friday or early next week.
“They'll be met with the exact same tariff unless they drop it, and that's what reciprocal means,” Trump said.
The U.S. dairy industry has long complained that it faces substantial barriers accessing the Canadian market. Canada maintains tariff-rate quotas limiting the volume of U.S. exports that can enter.
“It is accurate that Canada imposes a tariff of approximately 250% on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25% retaliatory tariffs in place,” Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association said in a statement. “However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement.”
The U.S. dairy sector has argued in multiple cases through the U.S.-Mexico-Canada Agreement’s dispute resolution that Ottawa’s management of those quotas keeps U.S. exporters from filling their allocated quotas. Retailers and food service operators have been excluded from receiving TRQs, according to the Office of the U.S. Trade Representative.
“Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA,” Rasdall Vargas said.
While the IDFA said it supports efforts to reduce trade barriers into the Canadian market, Rasdall Vargas stressed that the industry does not want to see a prolonged tariff war with one of its closest trading partners, which would only worsen the uncertain trade environment businesses are facing.
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Canadian Prime Minister Justin Trudeau included out-of-quota U.S. dairy imports in his first wave of retaliatory tariffs that went into effect on Tuesday. Rasdall Vargas previously told Agri-Pulse she expected further actions against the dairy sector in a second round of retaliation.
Similarly, lumber has been at the center of a long-running U.S.-Canada dispute. The U.S. industry has long accused the Canadian sector of benefitting from subsidies provided by the federal and local governments.
Notably, China suspended imports of U.S. lumber, ostensibly over plant health and pest concerns. China is the third-largest buyer of U.S. forest products and imported around $850 million of American logs and other wood.
In a press conference on Friday, Canada’s trade minister Mary Ng called the potential tariffs “completely unjustified” and rejected Trump’s suggestion that Canada has been “ripping off” the United States.
Trump also foreshadowed ongoing tariff adjustments in his Oval Office comments.
“There'll always be some modifications,” he said. “If you have a wall in front of you, sometimes you have to go around the wall instead of through it.”
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