If you’ve been paying attention to the news, you’ll know that Canada and the US are currently involved in a trade spat. While the US has most recently applied tariffs to a range of goods, from alcohol to hockey sticks, I wanted to take a look at the ever politically sensitive dairy industry.
Canada imports the majority of its dairy-related products from the US. In fact, in 2025 our US dairy imports totaled $1.3B.
Going back to the start of the millennia, Canada has consistently run a dairy trade deficit with the US (i.e. we buy more dairy products from the US than they buy from us).
Despite that, the US has imposed tariffs of 50% on Canadian milk powder, whey, casein and lactose, among other dairy products under Section 338 of the 1930 Tariff Act, the first ever imposition under this statute.
Canada retaliated with tariffs of 25-50% on certain imports of US dairy, which represent 25-30% of total US dairy imports in recent years.
Our opinion is that the big 3 dairy companies - Saputo (SAP), Agropur and Lactalis - will be able to mitigate the impact of the tariffs given their substantial operations in each country, providing them flexibility to manage each market domestically, redirect potential exports internally, etc.
On the matter of trade-related tariffs, we continue to anticipate limited and manageable direct impacts…
Conversely, we believe the tariffs will disproportionately pressure the smaller players, driving further industry consolidation in Canada to the benefit of the big 3.
