Canada’s Department of Finance announced it would rescind a digital services tax at the center of a trade dispute with the U.S. This allows negotiations between the countries to continue, but trade concerns remain for agriculture.
U.S. Meat Export Federation Vice President of Economic Analysis Erin Borror explains that Canada recently enacted legislation that enshrines the country’s dairy and poultry supply management systems, protecting them from being altered in trade negotiations.
“They have essentially tried to put guardrails around this program,” Borror says. “That sends a
troubling signal to many in the U.S., in that problematic areas for the U.S. are being redlined by
legislation in Canada and unable to be negotiated. So even some in the domestic ag industry in
Canada have raised the concerns about the signal this sends.”
Canada’s livestock and grain sectors opposed the move, warning it will tie negotiators’ hands and lead to lost opportunities in global trade.
Since March, Canada has also had in place a 25% retaliatory duty on sausages imported from the United States. Canada is the largest export destination for U.S. sausages. It accounts for more than $275 million in sales in 2024 — a “huge line item,” Borror says.
The U.S. and Canada have set July 21 as a target date for reaching a trade deal.
