Trump calls Canada's dairy trade policies a 'disgrace'

"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.

That prompted Canadian farmers from a variety of provinces to lobby for the creation of a new classification of milk product that could be priced competitively with American imports.

And a January 13 letter signed by many American dairy groups estimates companies in Wisconsin and NY are losing $150 million as a result of Canada's system.

"Class 7 is a domestic policy, the sole goal of which is to allow the Canadian dairy sector to be able to respond to a changing Canadian market environment", said Bouchard.

Trump levelled the threats - some of his strongest-ever anti-Canadian rhetoric - during an event at a Wisconsin factory where he unveiled his "Buy American-Hire American" executive order.

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

A letter from MacNaughton rebutting American criticism of Canada's trade practices in the dairy industry was released Tuesday.

Canada has created a new Class 7 milk tariff for ultra-pasteurized milk that's used to make cheese.

He said Canadian farmers are also trying to adapt, which led the Canadian dairy industry to develop a new "national ingredient strategy".

"Let's not pretend we're in a global free market when it comes to agriculture", Trudeau said Thursday in a question-and-answer session with Bloomberg television that preceded Trump's latest trade invective.

Saying it's important to correct factual errors, Ambassador David MacNaughton said in a letter to the governors of Wisconsin and NY the facts don't support the contention that Canada's dairy policies are the cause of financial losses for dairy farmers in the United States.

"The facts do not bear this out". "It's your own responsibility, as a country, to manage your production", a spokesperson for Dairy Farmers of Canada told the Milwaukee Journal-Sentinel last week.

Trudeau said the system, known as supply management, "works very well" in Canada.

"That really means they are not determining a price based on market demand or needs but are basing it on what competitors would supply it for", Stephenson said.

Although support for supply-management is one of the issues in contention in his party's ongoing leadership contest, Brown said the Conservatives' position remains in favour of the system.

With the spotlight focused on Canadian markets lost to American dairy processors in recent weeks, dairy is shaping up to become a contentious issue in future trade talks.

"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.

The Hendersons face a significant debt associated with quota and also significant debt for the purchase of farm equipment, he added. US dairy groups say the issue will hurt the entire USA dairy industry. "It's a disgrace", Trump said. Whereas he has shown if he says one thing and then actually hears good counter-arguments or good reasons why he should shift his position, he will take a different position if it's a better one, if the arguments win him over.

While exploratory talks on a Canada-China free trade deal between government officials take place in Ottawa next week, the first round of a high-level economic and financial dialogue will unfold in Beijing.

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