USA is litigating against Canada for more export of cheap milk

For the first time in the North American trade agreement, the United States is instituting proceedings against neighboring Canada. Washington wants the USMCA (often referred to as the "new NAFTA) to convene the disputes committee.

The US believes that Canada is still unjustly upholding the controversial Canadian system of milk and dairy prices.

Import tariffs and quotas for dairy products have been a problem between the two countries for many years. Canada controls dairy production through supply management - a complex system of production controls and tariffs to keep domestic prices stable.

Although the USMCA treaty stipulates that American milk processors will have slightly more access in terms of volume, because the Canadian pricing system is maintained, this has little effect.

Dairy imports such as American cheese and milk are subject to a tax of 300%. Canada is willing to allow more import volume at lower financial rates. US trade envoy Tai says Canada is still using its complex licensing and tariff system to favor Canadian manufacturers.

After four years of tumultuous US trade policy from former President Donald Trump, many Canadians had hoped for better relations under Joe Biden. Trump had imposed higher tariffs on Canadian steel and aluminum and threatened tariffs on the automotive sector.

In recent weeks, Canadian officials have faced mounting tensions with the US under Biden. For example, the timber export issue is flaring up again. Washington says it will double tariffs on coniferous wood imports, the latest step in a feud that has continued for nearly four decades.

Canadian Prime Minister Trudeau downplayed the tension over dairy, saying that "there will always be problems on which Canada and the US disagree."