US Dairy Sector Faces Uncertainty Amid Potential USMCA Changes

The US dairy industry is experiencing heightened uncertainty following recent statements from former President Donald Trump regarding the USMCA. Trump indicated that the trade agreement, which includes Mexico and Canada, might be allowed to expire or be renegotiated. This statement was made in the context of an upcoming review of the agreement scheduled for July 2026.

The US dairy sector has specifically accused Canada of employing unfair trade barriers. According to Shawna Morris, Executive Vice President of the National Milk Producers Federation and the US Dairy Export Council, Canada has been exploiting loopholes in its dairy trade commitments under the USMCA. These accusations focus on Canada's supply management system, which is said to create non-tariff barriers limiting US access to the Canadian dairy market.

The public hearings held by the Office of the United States Trade Representative (USTR) reveal a divide within the US agricultural sector regarding the trade agreement. The hearings, which involve 150 speakers and have received 1,500 comments, address key issues such as rules of origin, labor standards, and environmental regulations.

While many in the US agricultural industry defend the USMCA as vital for economic stability, the dairy sector's specific grievances with Canada highlight a complex challenge for any future trade negotiations. Becky Rasdall Vargas, Senior Vice President of the International Dairy Foods Association, stated that Canada's implementation of the agreement has restricted rather than improved market access for US dairy exporters.