Oh Canada, Reciprocal Tariffs for You

And the theme of the news this week is once again… tariffs. 

New news on tariffs, eh?! Ya, you betcha. This time, pertaining directly to our neighbors to the north: “Oh, Canada…”

Last Friday, Trump said he was ready to impose reciprocal tariffs on Canadian dairy and lumber products.

Soundbite: “Canada has been ripping us off for years on tariffs for lumber and for dairy products.” — President Trump

And the reciprocal tariffs will go alllllll the way up. Trump said Canada has had a 250% tariff on U.S. dairy products for years. (However, that rate only applies after the U.S. has reached a certain quantity of tariff-free dairy sales—a quantity the U.S. is not currently hitting in any product category.)

Trump’s call for reciprocal tariffs up to 250% comes a day after he exempted some Canadian goods from new 25% duties.

Moot point? Becky Rasdall Vargas of the International Dairy Foods Association reiterated that the retaliatory tariff would only apply if the U.S. were able to reach and exceed the quota on dairy exports written in the U.S.-Mexico-Canada Agreement (USMCA). But the U.S. has never been close to these quotas because of Canada’s self-protectionism measures. 

Timberrrrrr: Trump’s administration is pulling back environmental regulations so more trees can be chopped and the domestic lumber supply can increase. Trump added that this was “on an emergency basis.” The U.S. typically sources 30% of its softwood lumber from Canada annually. 

Turbulent tariffs: Trump has said tariffs will be ever-evolving. And industry players aren’t happy: “A prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and our rural communities,” Vargas said.