Trump demands Canada dismantle supply management or risk trading relationship

U.S. President Donald Trump says Canada will have to dismantle its supply-managed dairy system or else Americans will dramatically curtail its trading relationship a shot across the bow at Prime Minister Justin Trudeau, who has vocally defended the country's existing agricultural policies in the face of U.S. opposition.

"No tariffs, no barriers, that's the way it should be and no subsidies. In other words, let's say Canada, where we have tremendous tariffs. The U.S. pays tremendous tariffs on dairy, as an example, 270 per cent ... we don't want to pay anything, why should we pay anything?" Trump said, referencing the Canadian tariff imposed on U.S. and foreign milk imports.

Canada levies a tariff of270 per cent on milk,245 per cent on cheese and 298 per cent on butterin an effort to keepimports out andtightly control supply.

"It's very unfair to our farmers. Our farmers, whether it's through a non-tariff trade barrier or whether it's through very high tariffs ... You can't do that. It's going to stop, or we'll stop trading," he said. "You look at our farmers. For 15 years, the graph has gone just like this, down."

Donald Trump demands Canada dismantle supply management

6 years ago

Duration 2:20

The U.S. president says if Canada doesn't dismantle their supply management for dairy, he won't hesitate to dramatically curtail the trading relationship between the two countries

As recently as Thursday Trudeau said his Liberal government will strongly supportthe current system that uses quotas to controlthe amount of dairy products produced by farmers, toensure the national supply matchesexpected demand.

The Canadian Dairy Commission, which works with the provincial milk marketing boards to co-ordinate quotas and pricing,has consistently defended the system as a wayto avoid surpluses and shortages but also tohelp stabilize farmers' income.

We're like the piggy bank that everybody's robbing, and that ends- U.S. President Donald Trump

"There's a reason why Donald Trump continues to write tweets on dairy products and Canada it's because I've told him many times: 'No, he won't touch, we won't touch, our supply management system,'"Trudeau told reporters Thursday. "We will always defend our supply management system."

Canada's dairy producers introducednew prices for some productsin 2016 mainly on ingredients used in the production of cheese, yogurt and ice cream which some U.S. producers and processors have argued puts them at a competitive disadvantage against their Canadian equivalents.

• 'We don't blame you': Wisconsin farmers on Trump's blast at Canada's dairy industry

A Wisconsin milk processor blamed the price drop when it ended buying agreements with dozens of family farmers in that state, a decision that prompted the ire of Trump during the last U.S. presidential election campaign.

But others point to massive overproduction, an excess capacity, as the source of the U.S. industry's woes.The state of Wisconsin produces nearly as much milk as all of Canada it's worth $43 billion US to the state economy and its operations are export-oriented, whileCanada produces just enough product to meet national needs.

"Canadian and U.S. dairy industries are fundamentally different. While Canadians enjoy stable prices and supply, the U.S. market is vulnerable to unexpected surplus of product, driving prices down for farmers and disrupting the market for consumers,"Pierre Lampron, the president of the Dairy Farmers of Canada, said in a statement.

"President Trump seems to want nothing less than to see Canada's strong, stable and, efficient dairy farmers and sector wiped out. There is no monopoly on supporting national dairy interests. Just as President Trump is going to bat for his country's dairy sector, we call on Prime Minister Trudeau to stand up for our dairy farmers."

Treating U.S. like 'a piggy bank'

Trump said he doesn't blame foreign leaders for the state of the trading relationship, instead laying blame on past U.S. presidents who have entered into deals that, he asserts, haveenriched allies while hollowing out American industry.

He said while the U.S. has kept its tariffs low to promote global free trade, other countries have left protectionist policies in place, disadvantaging the U.S.

U.S. President Donald Trump speaks before leaving G7 summit

6 years ago

Duration 26:47

Trump gave a news conference before flying to Singapore to meet with Kim Jong Un. He talked about progress made at the G7 summit, his relationship with the other leaders and his demands for trade.

In a wide-ranging news conference at the G7 summit in Quebec,Trump said Canada and other G7 countries historically his country's closest allies have treated the U.S. like "the piggybank that everybody is robbing.And that ends. ... You know, it's like the gig is up. It's like the gig is up. They can't believe they got away with it [for so long]. Canada can't believe it got away with it."

Trump made his comments before leaving the G7 summit in La Malbaie, Que. early Saturday skipping an afternoon working group discussion on climate change, energy and protection of the world's oceans where trade issues have dominated the agenda due to a protectionist push by the Trump administration.

Ahead of the meeting, some G7 leaders telegraphed they'd use the summit to have "tough and frank" conversations with Trump and argue the virtues of freer trade as he tightens the tariff noose.

Those efforts seemed to have failed, as Trump doubled down on his pledge to erectfurther trade barriers if he cannot extract concessions from partners.

Trump warned countries against levying retaliatory tariffs on the U.S. after his administration imposed punitive tariffs on aluminum and steel imports from Canada, Mexico, and the EU on national security grounds.

Canada has already said it will impose some $16.5 billion in new tariffs on U.S. goods ranging from lawn mowers to felt-tipped pens in response to the new 10per cent levy on the country's aluminum and the25 per cent tariffon Canadian steel.

"We'll win that war 1,000 times out of a 1,000," he said.

Calls for bilateral deal with Canada, Mexico

Despite the tough words, Trump said his relationship with German Chancellor Angela Merkel, French President Emmanuel Macron and Trudeau is at a "10."

"The relationship that I've had with these leaders is great ... so you can tell that to your fake friends at CNN," he said after a reporter from that network asked about the state of the relationship with these close U.S. allies.

Speaking of the stalled NAFTA negotiations, Trump againreiterated he prefers to sign a bilateral deal with Canada rather than push ahead with an agreement with the three original signatories. He has said a U.S.-Canada deal will be easier to achieve given the similarities of the two advanced economies. U.S. negotiators have frequently sparred with Mexican authorities over wages and workers' rights.

"We're either going to have NAFTA in a better negotiated form or we're going to have two [separate]deals ... it'll have a sunset. We're pretty close on the sunset division," Trump said, referencing the U.S. demandfor a sunset clause in a final agreement.

Canadian negotiators have said afive-year sunset clause which would prompt a reworking of the trade deal every five years is a "poison pill" for trade talks. Canada and Mexico have opposed such a clausebecause of the economic shocks that come from uncertainty about NAFTA's future.

Trump will now beginhis nearly 20-hour journey to Singapore where he is expected to meet with North Korean leader Kim Jong-unon June 12, a tte--tte designed to encourage the rogue state to end its nuclear program.