What tariffs and tariff-rate quotas apply to US milk and dairy products in Canada?
Executive summary
Canada uses tariff‑rate quotas (TRQs) for U.S. dairy: specified volumes enter at low or zero duty while any imports beyond those quotas face very high “over‑quota” tariffs that routinely exceed 200% for many dairy lines (examples cited: milk up to ~241%, butter up to ~298%, blended powders up to ~270%) [1] [2] [3]. U.S. industry groups and press note that these over‑quota rates exist on the books but U.S. exporters typically operate well within the TRQ volumes; average fill rates have been low (about 21–27% in recent TRQ measures) so high over‑quota rates rarely apply to U.S. shipments in practice [4] [3].
1. How Canada’s system actually works — quota first, tariff later
Canada administers supply‑managed “within‑quota” access: for defined product categories the country allocates TRQ volumes that allow imports at low or duty‑free rates, and any imports above those TRQ amounts are subject to steep over‑quota tariffs that can exceed 200% or more [5] [6] [1]. Global Affairs and the Canada Border Services Agency issue allocation permits to quota holders; shipments with permits can enter at the within‑access rate until the quota is exhausted [7] [6].
2. How big are the over‑quota tariffs?
Multiple outlets cite over‑quota tariffs in the 200–300% range depending on the dairy product: for example, over‑quota milk lines have been reported around 241%, blended dairy powders up to 270%, and some butter tariffs approaching 298% [1] [8] [2]. Trade reporting and WTO data show over‑quota duties “as high as 314%” for some dairy items in some compilations [1].
3. The political flashpoint — numbers on the books vs. market reality
Political messaging has seized on headline percentages (250–270%), which are accurate descriptions of statutory over‑quota rates but omit that those rates apply only if TRQs are exceeded. Fact‑checkers and industry commenters emphasize that U.S. exports have historically not come close to breaching those U.S.‑Canada TRQs; average TRQ fill rates reported were roughly 26.7% for calendar‑year quotas and about 21.2% for quota‑year measures in recent reporting [4] [3]. Thus the high percentages exist, but they are a backstop rather than a routine applied duty [4].
4. Which dairy products and how many quotas?
USMCA and other trade commitments specify multiple TRQ lines for dairy — fluid milk, skim milk powder, butter, concentrated milks, yogurt, certain powders and “other dairy” — and Canada manages distinct TRQ volumes by product and year [9] [5]. Canada also holds dedicated TRQs under other agreements such as the CPTPP (for example a milk TRQ of 56,905,000 kg under CPTPP rules), and Global Affairs publishes allocation and quota‑holder lists [7] [10].
5. Why U.S. producers complain — quota administration and access, not just tariff levels
U.S. industry groups say the problem is not the published over‑quota percentage alone but how Canada administers TRQs: complaints include that allocation rules and reservation of in‑quota quantities to Canadian processors limit practical U.S. access, so the U.S. cannot utilize the low‑duty quotas even when buyers say they would import [3] [11]. The U.S. has used USMCA dispute procedures over TRQ administration; panels have issued mixed decisions, finding in some instances that Canada’s allocation practices violated commitments and in others that recent adjustments were permissible [12].
6. What reporters and fact‑checkers say about headlines
FactCheck.org, NewsNation/ABC and other outlets conclude that while Canada’s statutory over‑quota tariffs do include very high percentages, headlines claiming Canada “charges 250% on U.S. dairy” are misleading without the TRQ context because in practice U.S. exports have generally stayed within quota volumes and therefore avoid those over‑quota rates [4] [3] [2]. Other trade reporting and farm press pieces emphasize both the existence of steep over‑quota rates and the political reality that TRQ administration, not just the rates, drives market outcomes [8] [1].
7. What this means for exporters and policy debates
For exporters: in‑quota access requires permits and quota allocations administered by Canada; over‑quota shipments would face prohibitive duties [6] [5]. For policy: U.S. calls for lower tariffs must address TRQ volumes and administration; legal disputes under USMCA have focused on allocation practices as much as tariff magnitudes [12] [11]. Available sources do not mention specific current numeric TRQ volumes for every product in 2025 beyond the CPTPP milk TRQ figure and general references; consult Global Affairs Canada for exact, line‑by‑line 2025 TRQ schedules [7] [10].
Limitations: this summary uses the provided reporting, government notices and industry commentary; for line‑by‑line tariff rates and the exact 2025 TRQ fills and allocations, the government TRQ tables and WTO tariff schedules should be consulted (Global Affairs/CBSA postings cited above) [7] [6].