USMCA Update: U.S.-Canada Dispute Escalates as Talks with Mexico Continue
October 6, 2026
With the future of U.S.-Canada trade relations in limbo, NMPF Executive Vice President Shawna Morris traveled to Ottawa and Toronto the week of Sept. 14 for meetings with Canadian government and dairy industry officials, and to represent U.S. dairy at the International Association of Milk Control Agencies (IAMCA) annual meeting. Morris reiterated U.S. dairy’s longstanding priorities in reciprocal trade talks with Canada, including resolving Canada’s persistent efforts to sidestep its dairy trade commitments under USMCA, and made clear that U.S. dairy wants Canada back at the negotiating table rather than an ever-escalating trade war. At IAMCA, she outlined U.S. dairy’s perspective on the shifting trade policy landscape, emphasizing USMCA’s benefits while pressing for fixes where the agreement has fallen short.
The visits came amid a continued escalation in U.S.-Canada dairy trade tensions. On Aug. 22, the United States imposed 50 percent tariffs on certain Canadian dairy imports under Section 338 of the Trade Act of 1930, citing Canada’s discriminatory treatment of U.S. dairy exports. Canada retaliated with its own tariff list, effective Sept. 8. The United States responded by announcing bans on certain Canadian whey imports previously subject to the 50 percent tariff, along with new 50 percent tariffs on certain Canadian cheeses, which were not covered in the original action. Those bans and new duties took effect Sept. 29.
NMPF and the U.S. Dairy Export Council secured confirmation that U.S. exports shipped under Canada’s Import for Re-Export Program won’t be hit by retaliatory tariffs and have confirmed Canada is applying its remissions policy to goods used in manufacturing, processing, or packaging. In contrast, goods sold directly at retail in Canada still face the full retaliatory tariff. Unlike Canada’s 2025 retaliation, even USMCA-compliant products are now subject to this latest round.
