News G7 summit
American neighbors dispute over dairy
US President Donald Trump has lashed out at Canadian Prime Minister Justin Trudeau. Trump said he should not interfere with the tariffs on steel and aluminum, as Canada taxes US dairy exports with a whopping 270%.
In the Canadian province of Quebec last weekend, the G7 summit place† The US import duties on steel and aluminum from, among others, Canada, Mexico, China and the European Union (EU) were the most emotionally charged topic, although Trump had already indicated before the start that he would stick to his policy. During the closing statement, Trudeau expressed his displeasure to Trump and said that Canada will not let itself be walked over in the trade war.
Trudeau's statements were also supported by other world leaders, such as: Theresa May (Great Britain), Angela Merkel (Germany) and Donald Tusk (EU).
270% levy
At the time of the press conference, Trump was already on a plane to Singapore, where the meeting with North Korean leader Kim Jong-un will take place this week. Trump responded via Twitter that he finds Trudeau's statement weak and unfair. Trump also distanced himself from the closing statement. Moments later, he tweeted again. It stated that Canada earned almost $100 billion from trade with the United States (US), including a 270% tax on American dairy. According to him, this justifies the US import duties.
Trump's claim that Canada can levy the necessary dairy volumes from the US is indeed correct. Canada, after Mexico and Southeast Asia, is the most important market for American dairy. The US exported $2017 million to Canada in 636; trade has increased in recent years. For Canada, the US is the most important dairy supplier. Canada mainly imports products such as cheese, butter and milk protein.
NAFTA
The fight between Trump and Trudeau has been going on for a long time. When he took office, Trump indicated that Canada wants to protect its own dairy sector in an unfair way (with import duties). In addition to dairy, Trump wants to review trade with Canada on several fronts, through a different design of the free trade agreement NAFTA (free trade agreement between the US, Canada and Mexico) that has been in force since the 90s.
Trump does not want to withdraw from NAFTA, but would like to have bilateral (1-on-1) deals with Mexico and Canada. Mexico and Canada do not like this. Trump hoped that a renewed NAFTA agreement would be in place by early June, so that the latest version could pass through Congress this year. This is because congressional elections are being held in November, which could make the distribution of seats less favorable for Trump.
Since the negotiations do not want to go smoothly, a deal in the short term no longer seems possible. NAFTA is therefore known as a complex treaty, with many exceptions.
Photo: Evan El-Amin / Shutterstock.com
Wouter Job
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