The Homa Files

Some Canadian diary tariffs are even higher!
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The U.S.-Canadian tariff riff appears to center on 2 sectors: “cultural” and dairy products.

We dealt with the cultural products yesterday

Today let’s deal with diary tariffs …

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Here’s the scoop:

Canada has a quota system for imports, and above a certain volume, it imposes high dairy tariffs ranging from 201.5 percent to 313.5 percent.

Before those quotas are met, dairy products enter Canada duty-free or subject to much lower rates. Source

Let’s break that down.

First, the quotas.

Canada allows 64,500 metric tons of fluid milk into the country under the lower tariff rate.

Is that a lot or a little?

Answer: a little.

The quota is is filled by cross-border shoppers who buy milk in American stores and then bring it back to Canada.

Translation: Practically all commercial fluid milk imports to be consumed in Canada are subject to a 241% tariff. Source

So, is 241% high or low?

That’s a rhetorical question!

Of course it’s high.

In fact, it’s prohibitive.

But, U.S. dairy exporters found a loophole Canada’s dairy tariff system:

Ultrafiltered milk, milk protein used to make cheese and yogurt, was not on the tariff list or subject to quotas, so it is imported into Canada duty-free. Source

But Canada plugged that NAFTA loophole last year … and wants the loophole to stay closed in a revised agreements.

So, Trump’s negotiators are angling for higher quotas, lower tariffs … and no new tariffs.

To that point,, U.S. negotiators want the milk protein “loophole” legitimized in a revised NAFTA.

Makes sense to me.

Go get ‘em boys.

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This entry was posted on September 5, 2018 at 6:59 am and is filed under Canada, NAFTA, Tariffs - Trade, Trade - Free Trade. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.