Trump Threatens More Tariffs on Canada Friday, Monday or Tuesday
President Donald Trump told reporters that a 250% tariff on dairy products imported into Canada makes it impossible to sell U.S. dairy there, and that "a tremendously high tariff" on lumber in Canada also makes it impossible to export that product to Canada. He called U.S. exports to Canada in those two categories "almost nonexistent." He said he is going to set U.S. tariffs at the same levels.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Canada's tariffs on wood products range from zero percent to 9%, but all U.S.- originating goods in the chapter face no duties. Generally, the U.S. complaint about Canadian lumber is its own domestic subsidies.
The U.S. exported about $411 million worth of sawn wood to Canada in 2023, but imported $5.5 billion from Canada.
According to USDA, U.S. producers exported $1.14 billion worth of dairy products to Canada in 2024, up from $854 million in 2021, the first full year of USMCA, which granted more generous tariff rate quotas. It is the second-largest export market for dairy, after Mexico.
The U.S. imported $417.6 million worth of dairy products from Canada in 2024.
Also, according to an October 2024 USDA report, Canadian cheese TRQs were 98% filled, cream and fluid milk have high fill rates, and the U.S. sells more butter to Canada than the TRQ limit, as there are programs for importing butter for processed food destined for export that allows tariff-free import. The TRQs get bigger, too.
Trump told reporters March 7 that "when I left, we had that well taken care of. But under Biden, they just kept raising it. Very difficult to deal with the Canadian representatives." He said no one talks about the "250% tariff, which is taking advantage of our farmers. So that's not going to happen anymore. ... They'll be met with the exact same tariff unless they drop it, and that's what reciprocal means.
"And we may do it as early as today, or we'll wait till Monday or Tuesday, but that's what we're going to do."
Canada applies tariff rate quotas to U.S. dairy exports -- and the U.S. also has tariff rate quotas for dairy imports for Canada (but not for Mexico).
Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association, reacted to Trump's comments saying, "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. 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 (USMCA). 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."
She said the sector is grateful for the administration's attempts to counter Canada's protectionism in the sector. "At the same time, a prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and our rural communities. We urge Canada and the United States to negotiate a resolution to these issues – both Canada’s trade barriers to U.S. dairy exports and the tariffs – as expeditiously as possible."