MacNaughton's trade letter 'absurd': US dairy group

Canada changed its policy on pricing domestic milk to cover more dairy ingredients, leading to lower prices for Canadian products including ultra-filtered milk that compete with US milk.

Sterk, who sits on the board of the Dairy Farmers of Ontario, points out that the USA already exports a lot more dairy products into Canada than Canada sends back - some $930-million worth of milk, cream, butter and cheese compared to $235 million imported annually. Trump's comments came shortly after he received a letter from Gov. Scott Walker and New York Governor Andrew Cuomo, who urged the president to take action after Canada's sudden change in dairy pricing policy resulted in almost 100 Wisconsin dairy farms being dropped from their suppliers.

They're blaming Canada for their woes - and Trump took up their cause: "Because in Canada, some very unfair things have happened to our dairy farmers".

With Donald Trump ramping up his anti-Canada trade rhetoric, Justin Trudeau says the United States - like other countries - subsidizes its dairy and agriculture industries by hundreds of millions, if not billions, of dollars.

Gov. Andrew M. Cuomo is once again targeting Canadian dairy pricing programs that he and other lawmakers say hurt dairy farmers in NY. Trump promised that he will be working on a strategy with representatives of Congress, including speaker of the House Paul Ryan (R., Wis.).

The latest salvo came in a letter from David MacNaughton, Canada's ambassador to the United States, to Gov. Scott Walker and New York Gov. Andrew Cuomo. He called them a "disgrace" to USA farm workers.

"They (governors) want to be seen to be standing up for their dairy farmers and I think the Government of Canada wants to be seen to be standing up for its dairy farmers", he said.

"Canada needs to prepare for any eventuality and be ready to vigorously defend Canadian interests, but overreacting to the president's rhetoric would be a mistake", said Roland Paris, professor of worldwide affairs at University of Ottawa and Mr. Trudeau's former foreign-policy adviser. "We are going to have a great relationship with Canada". So we're going to have to get to the negotiating table with Canada very, very quickly. "We will judge American policy when American policy is announced".

Canada Wood, an industry trade group, said earlier this month it would "take the first steps to extend its reach to Wuhan, which is the economic engine of central China", by establishing a joint Sino-Canadian Modern Wood Construction Technology Center in the little-known Chinese city of more than 10 million.

USA prominence in the steel industry has been slipping for decades, and Mr. Trump is making some efforts to shore up the industry.

"Dairy trade between Canada and the USA massively favors the US, by a ratio of five to one", she said.

"We thank President Donald Trump for speaking out today in Wisconsin against the harmful pricing policy Canada implemented in an effort to stifle competition with the United States".

Earlier this week, Trump blamed Canadian dairy policy for driving American farmers out of work, and he ratcheted up his anti-Canadian invective Thursday from the Oval Office by calling Canada's actions a "disgrace".

The governors say Canada's actions could cost the USA economy hundreds of millions of dollars.

They say the Trump administration plans to take steps to protect the integrity of the US steel industry.

Canada has a supply management system that controls how much milk is produced here and imposes stiff tariffs of up to 300% on dairy imports.

The new order would direct US agencies to propose rules to prevent immigration fraud and abuse in the program.

His tougher talk on Canada - over longstanding dairy and lumber disputes - is raising concerns that a renegotiation of the North American Free Trade Agreement could grow more complicated and affect Ottawa as much as Mexico City.

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