A 50 per cent US tariff on Canadian dairy products, effective August 22, has disrupted cross-border dairy trade and introduced significant uncertainty for Canadian farmers and processors.
A 50 per cent US tariff on USD 20 billion worth of Canadian goods, including dairy products, which came into effect on August 22, has largely brought Canadian dairy exports to the United States to a standstill, according to Al Jazeera. Casey Pruim, chair of the British Columbia Dairy Association representing approximately 400 dairy farmers, said processors who had been exporting to the US were being priced out of the market, with the impact spreading across the provincial milk-marketing pool. He warned that if processor demand was squeezed, farmers would be forced to dump milk and, in the worst-case scenario, reduce their herds. Dylan Kruger, Director of Public Affairs at BC Dairy, said there was still considerable uncertainty around the impact of the tariffs and that it was too early to know whether milk no longer sold to the US could be redirected elsewhere. David Wiens, President of the Dairy Farmers of Canada, described the tariffs as completely unwarranted, telling CBC News that they would affect the supply chain not only in Canada but in the US as well.
Canada’s dairy trade deficit with the US had grown significantly since the Canada-United States-Mexico Agreement came into force on July 1, 2020. According to the Dairy Processors Association of Canada, Canadian dairy exports to the US rose from CAD 241.3 million in 2020 to CAD 308.7 million in 2025, while dairy imports from the US more than doubled from CAD 647.4 million to CAD 1.355 billion, accounting for 13.8 per cent of the total value of US dairy exports. Canada imposed retaliatory tariffs on September 8, covering USD 20 billion worth of US products, including a 50 per cent tariff on milk, cream and whey products and a 25 per cent tariff on many cheeses imported from the US. Canadian Prime Minister Mark Carney said Canada would match Washington’s new tariffs dollar for dollar to protect workers, farmers, families and businesses. Bryan Yu, Chief Economist at Central 1 Credit Union, said Canadian producers could not quickly adjust to a 50 per cent tariff and predicted the interim period before any deal could bring higher prices, weaker economic activity and deeper mistrust. Oxford Economics cautioned that Canada’s retaliatory tariffs would help some industries but hurt most and weaken economic growth by raising costs for producers and consumers.
Source: Al Jazeera
