Canada's dairy sector will be central issue at talks to renew the trade agreement between Canada, the U.S. and Mexico.CHRIS WATTIE/Reuters
President Donald Trump appears to have no shortage of grievances with Canada, with new perceived slights rolling out on a regular basis. When we’re not mistreating U.S. aircraft manufacturers, we’re (somehow) ripping off the U.S. with the new Windsor-Detroit bridge.
But Canada’s original trade sin in Trump’s eyes—which he regularly trots out on social media, often in ALL CAPS—is dairy. Specifically, how Canada uses its supply management system to control the volume and type of dairy products entering the country. In the U.S. Trade Representative’s report last year on foreign trade barriers, dairy featured prominently in the Canada section, and trade experts widely acknowledge the sector will be at the heart of this year’s talks to renew the Canada-U.S.-Mexico Agreement (CUSMA).
However, the way Trump has gone about championing the U.S. dairy lobby’s case—with tariffs, insults and repeated threats against Canadian sovereignty—has left a sour taste in the mouths of most Canadians and prompted a travel boycott the likes of which has never been seen.
So it’s worth comparing what Trump may hope to gain on dairy against what the U.S. has already lost on forgone Canadian travel spending. The gap is wide and growing. For instance, total imports of U.S. dairy in the third quarter of 2025 were $154 million. In that same quarter, Canadians spent $1.3 billion less while travelling in the U.S. than the year before.
The Trump administration hasn’t said how much additional U.S. dairy it wants Canada to import. Under the CUSMA deal signed in 2019, which Trump praised at the time, imports of U.S. dairy were envisioned to grow by around $400 million a year.
That never happened. And the U.S. has a good case to make that the way Canada allocates the licences to import tariff-free dairy are unfair, since only Canadian dairy processors and distributors can get them, and they have little incentive to import U.S. dairy.
Indeed, there are plenty of economists on this side of the border who’d like to see Canada scrap the supply management system, which they argue acts as a tax on Canadian consumers by making dairy and some other agricultural products more expensive than they otherwise would be.
Instead, antagonism by the White House — along with very real fears about border detentions — is keeping Canadians at home, leaving the U.S. tourism industry begging for them to return.