Guest Columns

Perspective:
WCMA

Cheese prominent in Canadian trade dispute

John Umhoefer

John Umhoefer is executive director of the Wisconsin Cheese Makers Association. He contributes this column monthly for Cheese Market News®.

Breaking news regarding Canada’s inclusion of cheese and other dairy products in its retaliatory tariffs on U.S. goods ramps up the long-simmering battle over dairy trade access between America and its northern neighbor.

Since President Trump announced broad, 50% tariffs on Canadian goods on July 20, including certain Canadian dairy products, negotiators from both nations worked to alter trade discrepancies for commodities ranging from steel and aluminum to forestry products, energy and dairy products. Negotiations collapsed in recent days, resulting in U.S. implementation of 50% tariffs on Canadian skim milk powder, whey products, lactose and milk concentrates.

On Aug. 25, Canada announced a broad set of retaliatory tariffs, hitting U.S. dairy hard. Our northern neighbor announced that as of Sept. 8, U.S. cheese entering Canada will face a 25% tariff, while milk products, cream and whey products will see a 50% tariff.

Canada’s decision to include tariffs on U.S. cheese comes at a time of rising American exports of cheese. In 2025, the U.S. exported 51.5 million pounds of cheese to Canada, according to U.S. Dairy Export Council data. Exports have been steadily rising since a low point in 2018 — in fact, cheese exports to Canada have tripled since that year.

Cheese exports worldwide now play a crucial role in overall sales for U.S. cheese manufacturers. Nearly 10% of U.S. cheese production moved abroad in 2025. Like our exports to Canada, worldwide exports of cheese have been on a growth pace since 2018 and now consistently break records each month. In 2018, the U.S. exported 766 million pounds of cheese; in 2025 that amount had grown 76% to 1.35 billion pounds.

Despite the growth of cheese exports to Canada, our northern neighbor has remained protective of its dairy industry and has limited the access Canadian consumers have to U.S. cheese. For example, the 2018 U.S.-Mexico-Canada

Agreement (USMCA) created higher, tariff-free quotas for U.S. cheeses to enter Canada, but in the last several years, Canada has allocated these “tariff-rate quotas” or TRQs to purchase U.S. cheeses to its own dairy processing industry, rather than to grocery retailers, dampening our potential cheese imports to Canada.

The Trump administration called out this tactic in a proclamation on its July 20, 2026, tariff increases for Canada. Retailers in Canada cannot access quota to buy U.S. cheese, but they can access quota to purchase cheese from the European Union (EU).

“By making retailers ineligible to use the USMCA TRQ for cheeses of all types, Canada discriminates against U.S. goods that are similar to EU goods…,” the administration stated.

A report from USDA’s Foreign Agricultural Service (FAS) in November 2025 notes that half of the TRQs issued to U.S. cheese moving into Canada are specifically for “industrial cheeses,” that is, cheese that will be used as an ingredient in further food processing in Canada and not for retail sale. According to the FAS report, in 2024, only 59% of the industrial cheese TRQ amount was purchased by Canadian buyers.

And while cheese exports to Canada and other nations are growing, domestic demand for cheese is soft.

According to the most recent retail scanner data provided by Circana, in four weeks ending June 14, retail sales of natural cheese were down 0.9% in volume compared to those weeks last year. In all of 2026 up to June 14, natural cheese sales were up 0.8%, and circling back 12 months ending on June 14, cheese sales at retail were up 1.1%.

This softening in 2026 isn’t spurred by rising wholesale prices. The benchmark cash market for Cheddar at the Chicago Mercantile Exchange has averaged a lackluster $1.52 weekly price per pound so far this year.

Robust production of fresh milk in 2026, capped by record-breaking levels of butterfat and protein in that farm milk, has seen cheese production rise 2.4% overall in the first six months of 2026. Cheese is plentiful and a relative bargain for consumers.

Robust production of U.S. cheese, in a time when markets worldwide are seeking more dairy protein in the form of cheese and whey and milk concentrates, means America is best served by free and fair market access around the globe. Today, cheese and dairy products are in the headlines as the U.S. and Canada debate overall trade, and a fair outcome that allows Canadian consumers more access to great U.S. cheeses is a must in these negotiations.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

© 2026 Cheese Market News • Quarne Publishing, LLC • Legal Information • Online Privacy Policy • Terms and Conditions
Cheese Market News • Business/Advertising Office: P.O. Box 24 • Sun Prairie, WI 53590 • 608/831-6002
Cheese Market News • Editorial Office: 5315 Wall Street, Suite 100 • Madison, WI 53718 • 608/288-9090