Fact Check: Canada has 250% tariff on dairy

Fact Check: "Canada has 250% tariff on dairy"

What We Know

The claim that Canada has a 250% tariff on dairy products is rooted in the complexities of trade tariffs and quotas. President Donald Trump has repeatedly asserted that Canada imposes tariffs as high as 250% or even 400% on U.S. dairy exports. However, this assertion is misleading. While it is true that Canada has high tariffs on dairy products, these rates are only applicable when U.S. exports exceed predetermined tariff rate quotas (TRQs) set under trade agreements like the United States-Mexico-Canada Agreement (USMCA) (source-2, source-3).

For instance, the maximum tariff rates for certain dairy products can reach 245.5% for cheese, 298.5% for butter, and 241% for liquid milk, but these tariffs are only enforced when imports exceed the quota levels (source-2, source-4). In practice, U.S. dairy exports have not approached these quotas, meaning that the tariffs are not currently affecting U.S. dairy sales to Canada, which have seen a significant increase in recent years (source-2, source-6).

Analysis

The assertion that Canada has a 250% tariff on dairy products is partially true but lacks context. The high tariff rates exist on paper but are conditional upon exceeding specific import quotas. Experts, including Chuck Nicholson from the University of Wisconsin-Madison, clarify that the U.S. dairy industry has never come close to exceeding these quotas, which means that, in practice, American dairy exports to Canada have been largely tariff-free (source-2, source-7).

Additionally, while some reports confirm the existence of high tariffs, they also emphasize that these tariffs are not currently being applied to U.S. dairy products due to low fill rates of the quotas (source-3, source-6). The International Dairy Foods Association has reported that U.S. dairy exports have never approached the quota limits, thus avoiding the imposition of these tariffs (source-2, source-5).

Conclusion

The claim that Canada has a 250% tariff on dairy is Partially True. While such tariffs are indeed set in Canada's trade policy, they are only applicable under specific conditions that have not been met by U.S. dairy exports. Therefore, while the high tariff rates exist, they do not currently impact the trade dynamics between the U.S. and Canada regarding dairy products.