At the beginning of April, Canada revised trade rules and imposed tariff duties on “ultra-filtered milk.” The change instantly rocked dairy farmers in Wisconsin and New York. Grassland Dairy Products, which had exported the product to Canada, suddenly terminated its contracts with over seventy family farms in Wisconsin. Because there was already a glut of milk on the market, most of these farmers report that they are struggling to find new markets for the product. Many predict imminent bankruptcy. Shuttering family farms in a democratic leaning state that narrowly voted for Trump in November is hardly good politics. It isn’t good business either. The National Milk Producers Federation estimates that Canada’s new tariff duties could cost American dairy farmers hundreds of millions of dollars.
Congressmen from New York and Wisconsin have pressed Trump to intervene and negotiate a better deal with Canada. It isn’t clear that Canadian officials have any interest in abandoning the rule change, which they claim only enforces tariff law that had previously gone unenforced. However, Trump’ pitch to the American people was that he had some special mojo that would him allow him to negotiate all sorts of new deals, far better than what other Presidents had managed. Obama, he claimed, was not a “natural” negotiator, like him. Though Trump never laid out details, he said he could do better and, so far, the opposite has been true.
In this case, there is good reason to suspect that Trump’s election has made a good deal with Canada harder to reach. Polls show that 84% of Canadians disapprove of Trump. Despite a historically close relationship between the two nations, only 43% of Canadians believe that Prime Minister Trudeau should work closely with Trump. 58% of Canadians even support a trade war, if Trump pursues his plans to “renegotiate” NAFTA. Thus, this new tariff duty could be the opening shot in a trade war. Thus far, it hasn’t been going well for American business.