President Donald Trump said late last week that Canada will face higher duties for some products beginning next month due to the Canadian government’s decision to retaliate against U.S. duties applied earlier this year. He also took the opportunity to reiterate his call for greater market access for U.S. dairy producers.
From Aug. 1, Canadian products not covered by the USMCA will face a 35% tariff, up from the existing 25%. Energy products and potash will still face the reduced 10% rate. Trump also took aim at what has become one of his top peeves with the U.S.’s northern neighbors: high out-of-quota tariffs on dairy products. U.S. dairy producers have long complained that Canada’s allocation of its tariff-rate quotas for dairy products disincentivizes purchases of U.S. products, leaving their quotas unfilled. Dairy producers in New Zealand have raised similar gripes with Ottawa, and the issue has been the subject of challenges under the USMCA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership dispute resolution mechanisms.
