U.S. President Donald Trump put his ignorance on full display – yet again – this past weekend at the G7 summit in Quebec when he blistered Prime Minister Justin Trudeau for having the audacity to not capitulate to the Trump administration’s demands.
The feud started as North American Free Trade Agreement (NAFTA) negotiations have been going on between Canada, the U.S. and Mexico.
The Trump administration recently announced that it would be imposing a 25 per cent tariff on imported Canadian Steel and a 10 per cent tariff on imported Canadian aluminum.
The announcement came after Trudeau rejected a meeting with Trump under the pretense that Canada agree to a five year sunset clause on a new NAFTA agreement.
The reason given at the time: national security concerns.
If this wasn’t absurd enough, the show was just getting started.
Trudeau hosted the leaders of the G7 nations in Quebec on the weekend. During the summit, Trump showed up late and left early.
During a post-summit press conference, Trudeau reiterated statements that he’s made when he said Canada would retaliate by imposing tariffs of our own.
“Canadians, we’re polite, we’re reasonable, but we won’t be pushed around,” Trudeau said.
Despite the fact that these statements echoed previous ones made by the Canadian government, it appears that this was the first time Trump heard these types of remarks.
He responded by reneging on his commitment to sign onto a declaration championed by the other G7 leaders in a tweet from Air Force One.
“PM Justin Trudeau acting so meek and mild during our G7 meetings only to give a news conference saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around.’ Very dishonest & weak. Our Tariffs are in response to his 270% on dairy,” (sic) the tweet read.
So, apparently the “national security” justification for the tariffs just went down the tubes. Which probably means that the World Trade Organization will deem the tariffs illegal and we’ll be right back to square one.
More importantly, this is the first time that the Trump administration has directly stated it’s desire to eliminate Canada’s supply management system without the use of veiled threats.
The supply management system regulates the production, prices and imports of dairy, poultry and eggs.
Canadian farmers purchase quota allotments, which regulate how much they can produce and sell. The aim is to insulate farmers from large price swings.
Under supply management, the amount of imported dairy products is tightly regulated.
But that doesn’t mean that Canada doesn’t allow any imported dairy.
Trump complains of a 270 per cent tariff on American dairy products. This is disingenuous.
For instance, diafiltered milk has been finely filtered in order to achieve a high protein content. It’s used by Canadian dairy producers to make cheese because it produces higher yields with less waste.
Since this ingredient is a post-NAFTA American invention, it’s not subject to tariffs. As a result, diafiltered milk is classified as a protein ingredient instead of a dairy ingredient, which means it is not subject to Canada’s tariff rate quota (TRQ).
TRQs are essentially the maximum amount of dairy that’s allowed to be imported before it’s hit with the 270 per cent tariff.
For 2018, the TRQ quantity is 5,333,000 kg – not exactly a pittance.
Not to mention, Canada already agreed to concede 3.25 per cent of its dairy imports when it signed on to the Trans Pacific Partnership Trade Agreement. Which, by the way, Trump pulled the U.S. out of.
For Trump to complain that the Canadian government is unfairly propping up our dairy industry is ludicrous when the U.S. government subsidizes its dairy industry to the tune of nearly $4 billion each year.
To top it all off, there are Canadian citizens who are chastising the PM for not capitulating to Trump.
Even Conservative leader Andrew Scheer criticized Trudeau for his handling of the negotiations. However, once Scheer realized the political popularity of Trudeau standing up to Trump, he quickly changed his tune.
But there are plenty of Canadians who argue that eradicating supply management would result in cheaper milk prices.
But at what cost?
The United States allows dairy producers to administer bovine growth hormone to dairy cows, while in Canada it’s illegal.
The main reason for outlawing the growth hormone rbST was the fact that it had a negative health impact on dairy cattle.
The Canadian government said in 1999 that it would not allow rbST because dairy cattle face “an increased risk of mastitis of up to 25 per cent, of infertility by 18 per cent and lameness by 50 per cent.”
Not to mention the fact that, in many rural communities, dairy farmers are a massive part of the economy.
They support other farmers and businesses by buying equipment, feed, vet visits and fertilizers.
So, we could avoid the bully by abandoning the supply management system – and our dairy farmers in the process – and agree to a sunset clause on a new NAFTA agreement.
Or we could stand up to the bully on the playground.
Kudos to the Prime Minister for holding his ground against the Buffoon in Chief.
Chris Lowrey
