Trump’s latest broadside against Canada on dairy products is off base, reveals that he doesn’t know who pays tariffs.
Here’s President Trump on Truth Social yesterday, June 27:
“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country. They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period. Thank you for your attention to this matter.”
While it’s true that Canada imposes sky-high tariffs on dairy products that exceed export limits established by the US-Mexico-Canada trade agreement, the International Dairy Foods Association said in a statement issued last Spring that the United States has “never gotten close to exceeding those quotas.” Here’s the conclusion of that IDFA statement:
“U.S. dairy is grateful for the Trump Administration’s efforts to hold Canada accountable on these protectionist measures. At the same time, a prolonged tariff war with our top trading partners will continue to create uncertainly and additional costs for American dairy farmers, processors, and our rural communities. We urge Canada and the United States to negotiate a resolution to these issues – both Canada’s trade barriers to U.S. dairy exports and the tariffs – as expeditiously as possible.”
Though the catalyst for Trump’s decision to suspend trade talks with our northern neighbor is Canada’s decision to tax digital services they get from the United States, Trump is using what appears to be never-imposed tariff rates on American dairy products as an example of how Canada is taking advantage of the United States. What’s more, he has derailed any talks that have been going on between the U.S. and our largest export market.
The digital services tax had been announced in 2024, so its implementation was in the hopper when Trump took office. Presumably it was one of many elements of our trade disagreements with Canada, but, odd as it seems that it should now, all of a sudden, be the reason for suspending talks with Canada, it fits the quirky pattern of trade flip-flops that characterize Trump’s trade policies.
Meantime, in his statement, Trump says that Canada will soon know “the Tariff that they will be paying to do business with the United States of America.” Fact is – and how many times this has to be repeated I’ll never know – the exporting country doesn’t pay the tariffs. It’s the importing country’s buyers who pay the tariffs.
Forbes has counted 22 times that Trump has changed his mind on tariffs. This sudden halt to talks with Canada makes 23 … and counting.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.
Photo: public domain, wikimedia commons
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