At an agricultural roundtable in the White House, President Trump turned up the heat in the U.S.-Canada dairy dispute, saying “we don’t want to be taken advantage of by other countries – and that’s stopping and stopping fast.” At nearly the same time, Commerce Secretary Wilbur Ross told reporters separately that the administration is looking for measures to resume sales of ultra-filtered milk from U.S. farms to Canadian processors.
“People don’t realize Canada has been very rough with the United States,” Trump said at the roundtable, where he signed an executive order for a review of regulations and laws that hinder the farm sector. The president cited the dairy dispute and a Commerce Department decision to impose 20 percent countervailing duties on imports of Canadian softwood lumber. “And we’re going to take care of our dairy farmers in Wisconsin and upstate New York and lots of other places,” he said.
Trump said he did not fear a trade war with Canada. “They have a massive surplus with the United States,” he said, suggesting Canada had the most to lose in a conflict. “When we’re the country with the deficits, we have no fear.”
Canadian Prime Minister Justin Trudeau said the U.S. and Canadian economies are intertwined and “it’s not just a one-way relationship,” reported the Toronto Star. “There are millions of good U.S. jobs that depend on smooth flow of goods, services and people back and forth across our border.” During a visit to Kitchener, Trudeau said, “You cannot thicken this border without hurting people on both sides of it.”
In the evening, the White House said Trump and Trudeau discussed the lumber and dairy disputes by telephone. “It was a very amicable call,” said the White House.
The dispute over ultra-filtered milk, a high-protein concentrate used in making cheese, involves a relatively small number of dairy farmers, around 75 producers. But dairy and lumber are longstanding causes of friction between the two largest countries in North America. Canada uses a supply management system to assure revenue to its milk producers, partly by limiting lower-cost imports. When dairy producers complained about U.S. ultra-filtered milk, a new product, Canada created a new Class 7 price category to make domestic ultra-filtered milk competitive.
“There’s a feeling in the dairy industry they were a little bit abrupt in the action they took a week before,” Ross said during the daily White House press briefing. “We are looking into whether there are measures we could do to try to correct that.”
Asked if the softwood duties were part of the milk dispute, Ross said, “Everything relates to everything else when you try to negotiate.” The trade case over lumber was initiated months ago; the dairy dispute flared as an issue in the past few weeks.
“As far as I know, there is nothing immediately planned,” Ross replied when asked if additional trade action was pending. He reiterated the administration’s intentions to re-negotiate NAFTA but did not say when the process would start formally. Ross said Congress needed to pass so-called fast-track authority to assure a prompt yes-or-not vote on trade agreements.
Trump began the day with a tweet hammering Canada on dairy: “Canada has made business for or dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”
Canada is the No. 2 market for U.S. farm exports and the second-largest source of U.S. food and ag imports. U.S. farm groups worry about possible disruptions in sales during trade disputes. Senate Agriculture Committee chairman Pat Roberts told the North American Agricultural Journalists meeting that he worried about “blow back” from Canada because the administration seemed to link dairy and softwood as related matters rather than separate issues.