Fulfilling their promises to retaliate against tariffs imposed by the U.S. administration, Mexico, Canada and China last week began enforcing increased tariff rates on a wide variety of U.S. dairy products.

“These new tariffs will have a significant impact on IDFA members who export their products to these countries,” said Beth Hughes, IDFA director of international affairs. “We’re taking these new developments very seriously. We’re conducting frequent discussions with administration officials to promote equitable trade and continually communicating IDFA members’ concerns to top trade officials.”

Mexico is the largest market for U.S. dairy exports and last year imported nearly $1.31 billion worth of U.S. dairy products, with cheese representing nearly $400 million in sales. Canada, purchased $637 million worth of U.S. dairy products last year ahead of China, dairy’s third-largest market abroad, which purchased more than $576 million.

Exports to Mexico No Longer Duty Free

The United States placed tariffs on steel and aluminum imports from Mexico on June 1. On June 5, Mexico implemented tariffs on U.S. cheeses ranging from 10 to 15 percent, and last week increased them to a range of 20 to 25 percent. Until last month, U.S. dairy exports to Mexico were duty-free under the North American Free Trade Agreement (NAFTA).

The new Mexican tariffs apply to all U.S. cheese exports except for processed and blue-veined cheeses. For a breakdown of types and tariff levels, see the chart below.

Canada Targets Dairy Products and Foods

On June 1, the United States placed tariffs on steel and aluminum imports from Canada. On July 1, Canada imposed a 10 percent tariff on U.S. exports of yogurt, pizza and quiche. Until that date, the country imposed no tariffs on pizza and quiche. It also allows 332 metric tons of yogurt to enter the country duty-free each year, but will impose the additional 10 percent tariff on products once the quota is filled.

See the chart below for a breakdown on the new tariffs.

China Retaliates with Second Layer of Tariffs

On July 6, the United States imposed a 25-percent tariff on $34 billion worth of Chinese imports, including dairy machinery, milking machines and their parts. China immediately retaliated by adding another layer of tariffs on U.S. imports, including an additional 25-percent tariff on various milk, cream, yogurt, whey, butter and cheese products.

Products affected by Chinese retaliatory tariffs are listed in the chart below.

U.S. officials said the administration plans over the next two weeks to impose more 25-percent tariffs on Chinese exports worth $16 billion in sales.

In addition, administration officials announced plans on Tuesday to impose 10-percent tariffs on an additional $200 billion worth of Chinese goods and asked for stakeholder feedback before August 30. The administration will announce a final decision to move forward with the tariffs and the date they would become effective after the comment period closes.

IDFA is closely monitoring these actions and continuing conversations with U.S. trade officials. Members facing trade disruptions are encouraged to contact Hughes at bhughes@idfa.org.