US may soon match Canada levies on dairy, lumber
WASHINGTON—US President Donald Trump on Friday railed against what he called tremendously high Canadian tariffs on dairy and lumber, and said his administration could soon impose reciprocal tariffs on Canadian products.
“Canada has been ripping us off for years on tariffs for lumber and for dairy products,” Trump told reporters in the Oval Office. “They’ll be met with the exact same tariffs, unless they drop it, and … we may do it as early as today or we’ll wait ’til Monday or Tuesday.”
Trump also mentioned India’s high tariff rates, but said India had agreed to lower its import duties.
The comments add to Trump’s trade pressure campaign against the Canadian government, which he accuses of failing to stop the flow of fentanyl across the northern US border and of unfairly taking advantage of the US market.
Most of the $1.6 trillion in two-way US trade with Canada and Mexico crosses borders duty free under terms of the US-Mexico-Canada Agreement on trade, which Trump signed in 2020.
Among the few exceptions are Canada’s high tariffs on dairy products that are part of its decades-old Supply Management system to protect Canadian dairy farmers. The system also includes import quotas and domestic production constraints to support prices.
Quotas
The USMCA deal provided limited duty-free quotas for US dairy products, but for anything above these levels, tariffs on specific products can exceed 200 percent. Washington for years has unsuccessfully challenged the way that Ottawa has allocated the USMCA dairy quotas.
Trump said Canada was charging a tariff of 250 percent for dairy products and a “tremendously high” tariff on lumber, adding that Canada had been “very difficult” to deal with.
The US already charges combined anti-dumping and anti-subsidy duties of about 14.5 percent on Canadian softwood lumber imports. Trump last week ordered a new national security probe into global lumber imports, which may add significantly to US lumber tariffs.
On Thursday, Trump suspended tariffs of 25 percent imposed this week on most goods from Canada and Mexico over the US fentanyl crisis, for 30 days.
These would have pushed up the US tariffs on Canadian lumber to nearly 40 percent, a move that the National Association of Home Builders says could add $7,500 to $10,000 to the cost of an average single-family home.
Short-term reprieve
In a Fox Business Network interview aired earlier on Friday Trump said he had granted the 30-day break for goods compliant with a regional free trade deal to help automakers. But he added that the reprieve was a short-term measure and tariffs could go up over time.
“I thought it would be a fair thing to do, and so I gave them a little bit of a break for this short period of time,” Trump said in the interview with Fox News’s “Sunday Morning Futures” to air on Sunday.
Trump said that on April 2, reciprocal tariffs would be implemented to equalize any duty rates between the three countries.
“I wanted to help the American carmakers until April 2nd,” Trump said. “April 2nd, it becomes all reciprocal. What they charge us, we charge them. It’s a big deal.”
White House trade adviser Peter Navarro told CNBC that under the reciprocal tariff plan, the US will match both tariff rates of other countries and non-tariff barriers.
Navarro said US tariff adjustments would reflect “in the aggregate, the unfairness embedded in the higher tariffs and non-tariff barriers that countries impose on us.”
He added that those tariff adjustments would be made through industry-specific and country-specific investigations.
