Why Canada’s supply management is a sticking point for Trump in trade talks
Global News
The issue of supply management for dairy farmers might end up being an issue both sides are unwilling to move on. Most Canadian politicians seem staunchly in support of the policy.
The target date for a new trade deal between Canada and the United States is a little over a week away, but one issue continues to be a sticking point between both nations: Canada’s supply management.
Supply management, which Canada uses in the dairy, poultry and egg sectors, has been a frequent target of criticism from U.S. President Donald Trump throughout his threats of tariffs and claims that Canada is “ripping us off.”
Last month, while demanding Canada repeal its digital services tax, Trump said Canada was “a very difficult Country to TRADE with,” claiming on his social media platform Truth Social that the country charges “tariffs” of up to 400 per cent on dairy products.
Canada uses a quota system that allows a set amount of some foreign dairy products into the country, and high tariffs only apply if countries try to exceed that allowed quota coming into Canada.
Canada’s supply management system, which dates back to the 1970s, has restricted foreign access to the Canadian dairy market in order to protect domestic producers and set quality standards for products.
Prime Minister Mark Carney vowed in the Liberal election platform that he will “keep Canada’s supply management off the table in any negotiations with the U.S.”
So how does it work?
The Canada-United States-Mexico Agreement (CUSMA) — which Trump re-negotiated to replace the North American Free Trade Agreement (NAFTA) during his first term — narrowly expanded U.S. access to Canada’s dairy market, which is protected under supply management rules.
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