The never-paid 250 per cent Canadian dairy tariff

Hey there, time traveller!
This article was published 12/03/2025 (242 days ago), so information in it may no longer be current.

The best lies always contain a kernel of truth. And in this world where people refuse to dig any deeper than what they want to believe, that little kernel can be all it takes.

Last week, U.S. President Donald Trump announced that 250 per cent U.S. reciprocal tariffs would be levied on Canadian dairy products exported into the United States, because Canada had a dairy tariff against U.S. products at that level. But hold that thought.

The kernel of truth is that a Canadian tariff does exist on the books at that rate. (It was negotiated and agreed to by Donald Trump when he signed the U.S.-Mexico-Canada trade agreement, an agreement he called at the time “the largest, fairest, most balanced, and modern trade agreement ever achieved. There’s never been anything like it.”)

Then, though, things get a little more complex.

That 250 per cent tariff has never actually been imposed on a single American dairy export — but why let facts get in the way of a Trumpian fantabulous story?

Even the International Dairy Foods Association (IDFA), agrees.

“It is accurate that Canada imposes a tariff of approximately 250 per cent on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25 per cent retaliatory tariffs in place,” according to IDFA’s Becky Rasdall Vargas, senior vice-president of trade and workforce policy. “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.”

And don’t let the name fool you. The IDFA is an American dairy association. On its website, the IDFA “advocates on behalf of America’s dairy industry to ensure our members have the tools and resources they need to innovate and thrive.” Canadian and Mexican dairy industry operations can be members, but as the IDFA points out on its website, “IDFA advocates for the protection of existing trade agreements and the development of new, tariff-reducing trade agreements in order to ensure U.S. dairy products are globally competitive.”

The American government agrees with the IDFA that things like Canada’s quota system are protectionist, so it did what reasonable and responsible trading partners who have a signed and sealed trade agreement between them — the U.S. government made a complaint to a dispute settlement panel. Twice. The United States won one case in 2022, but lost the second, in 2023.

And that’s where it stood.

Then along came Donald Trump.

The truth is, according to 2024 Statistics Canada market data, Canada exported $357.9 million in dairy products to the U.S., while the U.S. exported $877.5 million worth of dairy products — without any tariffs — into Canada.

In the curious economic Trumpworld, where having a trade deficit with a nation means that nation is stealing from you, that would mean the U.S. is already stealing $519.6 million from us on dairy sales alone — and that’s still not good enough for Trump. (The truth is that a trade deficit just means that you’re buying more of a product from a foreign country than you are selling to that country — you’re still getting valuable product for the money you spend in that foreign country, a concept that seems to escape the president completely.)

The bottom line is simple: the U.S. sells almost two and a half times more dairy products into Canada tariff-free than Canada sends the other way.

Yet Trump wants to levy a very real 250 per cent tariff against every Canadian dairy exporter, to answer a Canadian paper tariff that not one American dairy exporter has ever had to pay.

Caution: stable genius at work.