U.S. Dairy Association Opposes Foreign Trade Rules
The International Dairy Foods Association filed comments with U.S. trade authorities to oppose foreign government policies in the European Union and Canada. These policies threaten the competitiveness of American dairy manufacturers and exporters.
The organization submitted two sets of filings to the Office of the United States Trade Representative and the United States International Trade Commission. The submissions target European carbon border rules and Canadian milk pricing systems.
European Carbon Border Rules
The association raised concerns about the European Union’s Carbon Border Adjustment Mechanism in its filing with the U.S. Trade Representative. While dairy products are not currently covered under the carbon tariff, future expansions could increase costs for specialized equipment.
American dairy processors rely on specialized machinery manufactured in Europe. Higher carbon fees on steel and aluminum used by European suppliers could be passed on to U.S. buyers.
“If CBAM fees are applied to additional materials, components or machinery, the resulting costs could be passed to US importers and customers,” said Becky Rasdall Vargas, IDFA senior vice president of trade and workforce.
The association asked trade officials to prevent the carbon mechanism from extending to downstream products. The group also wants to maintain exemptions for food and agricultural goods.
Canada's Milk-Class Pricing Disadvantages U.S. Exporters
In a separate filing with the International Trade Commission, the organization addressed Section 338 of the Tariff Act of 1930. This provision allows the U.S. president to impose import duties of up to 50% on imports from countries deemed to have discriminated against US commerce.
The association highlighted Canada’s milk-class pricing system as a policy that disadvantages U.S. exporters.
These pricing arrangements set rates for certain milk proteins and nonfat milk solids below the cost of production.
“IDFA appreciates the Administration’s efforts to use all available trade tools to bolster American manufacturing,” said Rasdall Vargas.
The group urged the trade commission to use transparent, evidence-based procedures when evaluating foreign trade practices. Regulations like the European Corporate Sustainability Due Diligence Directive also affect the competitiveness of U.S. dairy companies.
What Is the Carbon Border Adjustment Mechanism and Section 338
What is the Carbon Border Adjustment Mechanism?
The European Union mechanism places carbon-related charges on certain carbon-intensive imports. It currently excludes dairy products but could indirectly raise equipment costs for U.S. processors.
How does Section 338 of the Tariff Act work?
The 1930 statute authorizes the U.S. president to levy import duties as high as 50% on products from countries found to have discriminated against American commerce.
The trade commission requested input on how it should define “discriminatory” or “unreasonable” actions against US commerce.
What specific Canadian policies are under scrutiny?
The International Dairy Foods Association cited Canada’s milk-class pricing policies for setting prices below the cost of production for certain milk proteins and nonfat milk solids. This practice can make commercially viable U.S. dairy imports less competitive in the Canadian market.
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