Canada’s dairy supply management system targeted by US tariff threat
10 reported
A single-source report from BBC News indicates that Canada's dairy supply management system has been singled out by US President Donald Trump as one of three main irritants used to justify a 50% tariff on $20bn worth of Canadian goods imported to the US, set to take effect in August. The system, which involves production quotas, set pricing, and import quotas on dairy, eggs, and poultry, has been in place since the early 1970s. Canadian politicians have indicated that dairy is a non-starter in negotiations, with Quebec Premier Christine Fréchette stating on Tuesday that supply management was non-negotiable. The system has been criticized by the previous Biden administration, the UK, and the OECD, and some Canadian economists and pundits have called for its reform. However, polling suggests around 77% of Canadians support keeping the system in place.
What’s reported
Trump singled out Canada's dairy supply management as one of three main irritants justifying a 50% tariff on $20bn of Canadian goods, effective in August.
The system has been in place since the early 1970s and involves production quotas, set pricing, and import quotas on dairy, eggs, and poultry.
Quebec Premier Christine Fréchette said on Tuesday that supply management was non-negotiable.
US-Canada Trade Minister Dominic LeBlanc called the system "a cornerstone of Canada's economy and our rural communities."
US producers have tariff-free access to only 3.5% of Canada's market; Canada imported $1.3bn worth of US dairy in 2025.
The Biden administration twice challenged Canada's dairy quota practices under the USMCA.
The UK walked away from trade talks in 2024 over disagreement on tariff-free access for British cheese producers.
The OECD has criticized the system for distorting production and trade.
Around 77% of Canadians support keeping the system, according to polling.
Canadians paid an average of C$3.19 for 1L of milk in May, while Americans paid C$1.95.
Key figures
Donald Trump, US President
Christine Fréchette, Quebec Premier
Dominic LeBlanc, US-Canada Trade Minister
David Clement, Canadian policy director at Consumer Choice Center
Jen Gerson, Calgary journalist and writer
Gary Johnson, Ontario resident
Mark Knudsen, Mississauga resident
David Wiens, third-generation dairy farmer and president of Dairy Farmers of Canada
Ryan Cardwell, professor at University of Manitoba
Sources: BBC News
