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Canada is one of the countries that President Trump has accused of taking advantage of the U.S. when it comes to trade. He's explicitly called out Canada for slapping tariffs of more than 270 percent on U.S. dairy products. The Canadian dairy industry is protected by a decades-old system. NPR's Jackie Northam talked to Canadian dairy farmers about how that system works and what changing it would mean for them and for the U.S.
JACKIE NORTHAM, BYLINE: President Trump has railed against Canada's dairy industry, calling the country's steep trade barriers on milk, cheese and butter a disgrace and that the U.S. will not stand for it. The president may not like it, but those tariffs are part of a politically sensitive, decades-old policy in place to protect Canada's dairy farmers.
MELODIE SHERK: All right. Let's go.
NORTHAM: Melodie Sherk gently prods black and white cows towards milking machines at the Pinehill Dairy, her family-run farm in Plattsville, Ontario, about three hours from Detroit. It happens three times a day for the more than 100 cows on the farm.
MURRAY SHERK: So the milk is flowing out of the cow now through a meter into a line.
NORTHAM: Murray Sherk, the owner, knows in advance how much milk his cows are allowed to produce and how much he'll be paid. This system, called supply management, is the backbone of Canada's dairy industry. It was introduced in the early 1970s and has succeeded in avoiding a milk surplus, says Sherk.
MURRAY SHERK: The stability of our system is of great benefit to not only farmers but also all kinds of other businesses.
NORTHAM: But other countries, including the U.S., see the system as protectionist in large part because of the high tariffs Canada places on dairy imports. They range from 241 percent for milk to 300 percent for butter. The tariffs kick in once a country has exported its quota to Canada. President Trump has complained those tariffs are unfair. But Graham Lloyd, the CEO of Dairy Farmers of Ontario, says Canada's supply management system is for domestic, use not competing with the U.S.
GRAHAM LLOYD: We're not challenging them internationally. We don't increase production with a view to - saying, let's go and pursue a Mexican market, or let's go and pursue a European market. It is designed for domestic consumption. So it's domestic policy.
NORTHAM: Lloyd says in recent years, the U.S. has had a trade surplus with Canada in dairy products. Last year, it exported more than four times the amount Canada sent to the U.S. President Trump is trying to protect dairy farmers in states like Wisconsin and New York. Some of them are going under, but that's because there's still a glut of milk in the U.S. Canadian dairyman Sherk says the U.S. can't blame Canada for that.
MURRAY SHERK: By somehow opening up the Canadian market to American producers, it is not going to solve their overproduction problem. What they need to have is some way of controlling production because the market just gets flooded.
NORTHAM: But tariffs of 241 percent, 300 percent? Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University, says even before Trump's criticism, there were reasons to reconsider Canada's supply management system.
SYLVAIN CHARLEBOIS: I do think that Mr. Trump is looking at a system that is a bit archaic, to be honest. And I would say that if we are to become trade-focused as a nation in Canada, we have to supply management on the table if we want to be taken seriously.
NORTHAM: But that could mean more competition between Canadian and U.S. milk. And it would mean changing a 40-year-old system in Canada that dairy farmers and politicians here are loath to give up, despite pressure from the Trump administration. Jackie Northam, NPR News, Plattsville, Ontario.
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