US Administration Targets Canadian Agricultural Supply Management Yet Again
Source: dairynews.today
The US administration under President Donald Trump has renewed its focus on Canada's agricultural supply management system, reminiscent of past trade squabbles during the negotiation of CUSMA.
US President Donald Trump is once again taking aim at Canada’s agricultural supply management system, a previous source of malcontent during the negotiation of NAFTA’s successor, the Canada-US-Mexico Agreement (CUSMA), in 2018.
Under supply management, certain Canadian commodity sectors—namely dairy, poultry and eggs—limit production and imports, and guarantee minimum prices to ensure stability for producers. On April 1, 2025, the Office of the US Trade Representative released the National Trade Estimate Report, listing agricultural supply management as a barrier to trade, arguing that it limits US exports and raises Canadian prices.
Yet, although the US announced new "reciprocal tariffs" on April 2, 2025, Canada has thus far avoided further punitive measures. Tensions over supply management remain, especially in light of past disputes. In January 2022 and November 2023, CUSMA's dispute panels issued reports that at times sided with Canada, acknowledging its practices yet prompting revisions to Tariff-Rate Quotas (TRQs).
Prime Minister Mark Carney has maintained that supply management will not be negotiated in upcoming trade talks. While the US administration argues that Canada imposes high tariffs on dairy imports, these apply only beyond specific TRQ limits, never surpassed by the US. The supply management structure, disputed by the US, seeks to stabilize Canadian markets, contrasting with the US policy landscape, which subsidizes its own dairy industry differently. Continuing challenges in CUSMA settings have upheld the legality of supply management, yet contention remains prevalent.
As Canada approaches its federal election on April 28, 2025, these cross-border trade dynamics are bound to feature prominently in post-election discussions between the two nations.
Under supply management, certain Canadian commodity sectors—namely dairy, poultry and eggs—limit production and imports, and guarantee minimum prices to ensure stability for producers. On April 1, 2025, the Office of the US Trade Representative released the National Trade Estimate Report, listing agricultural supply management as a barrier to trade, arguing that it limits US exports and raises Canadian prices.
Yet, although the US announced new "reciprocal tariffs" on April 2, 2025, Canada has thus far avoided further punitive measures. Tensions over supply management remain, especially in light of past disputes. In January 2022 and November 2023, CUSMA's dispute panels issued reports that at times sided with Canada, acknowledging its practices yet prompting revisions to Tariff-Rate Quotas (TRQs).
Prime Minister Mark Carney has maintained that supply management will not be negotiated in upcoming trade talks. While the US administration argues that Canada imposes high tariffs on dairy imports, these apply only beyond specific TRQ limits, never surpassed by the US. The supply management structure, disputed by the US, seeks to stabilize Canadian markets, contrasting with the US policy landscape, which subsidizes its own dairy industry differently. Continuing challenges in CUSMA settings have upheld the legality of supply management, yet contention remains prevalent.
As Canada approaches its federal election on April 28, 2025, these cross-border trade dynamics are bound to feature prominently in post-election discussions between the two nations.
