U.S. President Donald Trump has delivered a sweeping broadside at Canada, blasting the northern neighbour for trade practices he says must be corrected in three areas: energy, lumber, and dairy.
Canada is not the problem for US dairy producers and will stick with its system of protectionist dairy quotas, Prime Minister Justin Trudeau says.
"Let's not pretend that we're in a global free market when it comes to agriculture", he told Bloomberg News editor in chief John Micklethwait during a question and answer session in Toronto.
Trudeau's comments come two days after Trump promised US dairy farmers he would intervene to restore exports of American milk to Canada. Canada's dairy sector is protected by high tariffs on imported products and controls on domestic production as a means of supporting prices that farmers receive. He stood by his own system, by saying every country subsidizes agriculture. It was Trudeau's first comment since Trump first attacked the Canadian dairy industry on Tuesday at an event in Wisconsin. We have a supply management system that works very well here in Canada. Canadian Foreign Minister Chrystia Freeland, asked for a reaction, rejected the suggestion of wrongdoing. "It's a disgrace", Trump said. The threat to get rid of or alter NAFTA is a potential problem for Canada, whose biggest trade partner is the United States.
Despite the tough talk from Trump, Trudeau said he saw an opportunity to engage with the U.S. President. "Rules, regulations, different things have changed".
USA dairy groups appealed to Trump for help after Canada recently introduced a new policy that gives Canadian producers an incentive to buy domestic supplies of ultra-filtered milk, a concentrated ingredient used to boost protein content in cheese and yogurt. "A protracted dispute will only drive up the cost of wood and homes for USA consumers", Freeland said.