Trump's Canadian dairy program

President Donald Trump's tirade on Twitter over the weekend aimed at Canadian Prime Minister Justin Trudeau has elevated dairy trade between the two countries to the top political issue in Canada.Dairy was once considered a lower-rung issue in the North American Free Trade Agreement talks, but President Trump tied high Canadian dairy tariffs to his own push for steel and aluminum tariffs. The U.S. held a dairy trade surplus with Canada in 2017 that ran anywhere from $113 million to $521 million, depending on the math of different agencies and trade associations. Canada and the U.S. both use tariff-rate quotas to allow trading partners to export a certain volume of cheese, butter fat, butter milk, dry milk, cream, yogurt, whey products and ice cream at lower tariffs. Then the tariff volumes spike once the quota limit is reached. In Canada, once those quotas are reached, tariffs can reach as high as 294% for some products. The 270% number President Trump uses comes from blended dairy powder over the tariff-rate quota, which is 3% for the U.S., according to Canada's customs tariffs schedule.  The U.S. held a dairy trade surplus with Canada in 2017 that ran anywhere from $113 million to $521 million, depending on the math of different agencies and trade associations. The U.S. Dairy Export Council cites that Canada was the third-largest market for U.S. dairy products in 2017, buying $636 million in products, up 1%. Comparatively, dairy trade ranging somewhere from $341 million to $751 million between the two countries still comes down to one-tenth of 1% of trade volume between the U.S. and Canada last year. U.S. exports to Canada were $341.2 billion in 2017 while Canadian exports to the U.S. were $332.8 billion.