Canada's Dairy Shield: MPs Tie USMCA Hands!

On July 3, 2025, Canadian Members of Parliament enacted Bill C-202, imposing stringent limits on trade concessions regarding dairy, poultry, and eggs during the USMCA review. The legislation prevents increases in tariff-rate import quotas or reductions in out-of-quota tariffs. This move, aimed at protecting the Canadian supply-managed sectors, has raised concerns within the U.S. dairy industry about limited market access and high tariffs.

The U.S. dairy industry, already wary of Canada's 250% tariffs on over-quota imports, perceives this law as a potential hurdle in bilateral trade talks. President Donald Trump has criticized Canada's high tariffs as detrimental to American exporters. Although the bill predates his focus, its swift passage through Canadian Parliament aligns with increasing tensions in U.S.-Canada trade relations.

Becky Rasdall Vargas from the International Dairy Foods Association notes the law signifies Canada's firm stance on protecting its industries from international pressure, posing challenges for future trade negotiations. This decision underscores Canada's dedication to its supply management system, potentially impacting agribusiness trade discussions amidst global dairy market uncertainties.