A North American trade pact — negotiated by President Donald Trump during his first term — means that most American products enter Canada duty-free. Rankings of the world’s most open economies usually put Canada near the top.
But when Trump looks at Canada, he says, he sees a predator out to cheat the United States and strangle its industries.
America has been “ripped off for 50 years by Canada,” the president declared Saturday when asked if he was considering pulling out of the three-way agreement he signed with the leaders of Canada and Mexico in late 2018.Landing on the list of nations with allegedly unfair trade policies is a jarring turn of events for Canada, a country that built its economy around international commerce. Canada’s trade is equal to 64% of its economic output, the World Bank says, versus 25% for America.
There’s time for a deal to end the standoff
The neighboring countries need each other economically. Canada sends about 70% of its exports to the United States. U.S. refineries need Alberta’s oil. American farmers need Canadian potash fertilizer. Communities on the northern U.S. border rely on electricity generated in Canada.The conservative Heritage Foundation in Washington ranked Canada No. 14 (out of 184 economies) on its Index of Economic Freedom; the United States landed eight spots lower at No. 22.
The libertarian Fraser Institute in Vancouver likewise ranked Canada No. 11 (out of 165 countries and territories) on its Economic Freedom of the World report.
Before the latest blowup, Canada’s effective tariff rate on U.S. imports was about 2.4%, less than half the 5% that the United States imposed on Canada, according to calculations by Oxford Economics. Most U.S. exports enter Canada duty-free under the US-Mexico-Canada Agreement that took effect on July 1, 2020.
Canada Protects it’s Dairy Industry, but..
So, does the US. The US protects and subsidizes their dairy industry
The 588-page study by Grey, Clark, Shih and Associates — commissioned by Dairy Farmers of Canada (DFC) — says the American government contributed around $22.2 billion in direct and indirect subsidies to the dairy sector in 2015.Lead author Peter Clark shared the numbers at DFC’s annual policy conference in Ottawa this week.
“The support is completely ignored,” he said. “When it comes to farm support, the U.S. has the deepest pockets; deeper even than the European Union. Our study provides detail nationally, and on a state basis, the losses to U.S. dairy farmers. USDA data reveals that for more than a decade, U.S. farm gate prices for milk fail to cover costs of production.”
But, but, that’s a Canadian source- See below an American source
https://www.ers.usda.gov/topics/animal-products/dairy/policy
The program is administered by USDA, Agricultural Marketing Service (AMS). Classified pricing and The revenue pooling are two key elements of FMMO regulations. FMMOs set minimum prices paid by milk processors for milk from dairy farmers according to how the processor utilizes the milk.
Dairy Forward Pricing Program
However, the forward contracts cannot cover Class I fluid milk. Handlers entering these agreements will pay farmers the contract price instead of the FMMO calculated minimum blend price. However, handlers must continue to account to the Federal Order revenue pool for all milk they receive at the respective order’s minimum class prices
Dairy Margin Coverage
DMC is a voluntary program that protects dairy producers when the difference between the U.S. all-milk price and a national average feed cost (as calculated by a formula) falls below a certain dollar amount selected by the dairy farmer
Dairy Indemnity Payment
The program provides payments to dairy producers when a public regulatory agency directs them to remove their raw milk from the commercial market because it has been contaminated by pesticides and other residues
Dairy Revenue Protection
The Dairy Revenue Protection program insures against unexpected declines in each participating operation’s quarterly revenue from milk sales relative to a guaranteed coverage level.
Check the link yourself– The US government subsidizes the US dairy industry in many ways..
Back to Fortune..
Canada shields its dairy producers through a convoluted system that imposes tariffs of more than 200% on most dairy products — nearly 300% on some items, such as butter — once they’ve exceeded a quota, according to Leonard Polzin, a specialist in dairy markets at the University of Wisconsin.
Polzin said the Canadians have a strong incentive to protect their politically sensitive dairy industry from competition with America.
Wisconsin alone produces more milk than all of Canada. American dairy producers are so adept at producing large quantities of low-cost milk, Polzin said, that if Canada opened its market completely “we would dump so much product there’s no way they could remain as a viable industry.’’
Trump claimed falsely on social media Tuesday that “Canada doesn’t let our Great Dairy Farmers sell into the Canadian Market.’’
In fact, the United States agreed in the USMCA to allow Canada to continue the supply management system in return for giving American dairy farmers more access to the Canadian market. And American dairy producers have made headway:U.S. dairy exports to Canada rose more than 11% last year on top of an 8% increase in 2024, according to the U.S. Department of Agriculture.
The United States already runs a hefty trade surplus in dairy with its northern neighbor, exporting $1.3 billion worth of dairy products to Canada last year while importing just $585 million, according to the USDA.US runs a trade deficit with Canada because of oil
Overall, the United States runs a trade deficit with Canada — $27.3 billion last year — and Trump isn’t happy about it.
But the gap between what the U.S. sells to Canada and what it buys can be explained by one industry: oil. Canada exported more than $85 billion worth of crude oil to the United States in 2025.
Refineries in the U.S. Midwest need heavy sour crude oil from Alberta’s oil sands deposits.
“
It’s the only oil they can use,” Appleton said. “They can’t use Texas crude. They can’t use Venezuelan crude. They’re not set up for it. It would take years and billions of dollars to shift over.’’What’s more, the Canadian oil sells at a discount to the benchmark U.S. crude oil.
Repeating as I end this piece
What’s more, the Canadian oil sells at a discount to the benchmark U.S. crude oil.
Trump is good at one thing for sure, undeniable- misrepresenting to the point of outright lying