By admin 
Joaquin Contente admitted to not knowing much about the newest round of Canadian tariffs on American goods.
Read more Yes on a data center in my backyard. Why? It’s an ideal municipal neighbor | Opinion
But the long-time Hanford dairy farmer knows his industry and the hardships it has gone through. In the last 15 years, Contente said his Kings County area has lost 25 dairies in a five-mile radius. The trade wars won’t help with that, he said.
“Sadly, this is going to impact dairymen here, all this trade noise going on between the U.S. and Canada,” said Contente, who has a mid-size farm of 850 cows and is a California Dairy Campaign board member. “We have a very, very fragile industry, especially on the smaller producer side. We cannot take many more big hits anymore.”
The California dairy industry — which is the nation’s largest in terms of production and is the highest valued commodity in the state at over $8.6 billion — is caught up in the latest trade blowup between the United States and Canada.
The new Canadian tariffs, slated to go into effect Sept. 8, target the dairy industry but largely avoid direct hits to California’s more than 400 specialty crops. The agriculture-related tariffs are also not expected to hurt consumers significantly.
Canada is California’s for numerous commodities such as wine, lemons, table grapes and carrots. Canada’s proposed tariffs on around $20 billion worth of U.S. goods are in retaliation to and match, dollar-for-dollar, U.S. tariffs on Canadian goods. President Donald Trump has said he imposed new 50% tariffs on Canadian goods because the northern country discriminates against certain American exports.
California’s wine industry remains the commodity most severely affected by the ongoing trade war. After about 17 months, the U.S. alcohol ban in the majority of Canadian provinces remains after the trade talks broke down.
The most recent tariff battle comes at a time when California growers and their advocates say they are facing challenges like never before due to rising costs and falling crop prices. Consumers continue to experience higher prices at the grocery store, although inflation has eased since 2023.
Costs are still rising for both farmers and shoppers not only because of Trump’s long-term tariff fights, but also because of conflicts in Iran and Ukraine. The tariff battles involve steel and aluminum, materials used for farm equipment and cans, pushing prices higher, and the wars have led to skyrocketing fuel costs and supply chain issues.
“I think everyone in the fresh fruit and produce sector is breathing a pretty heavy sigh of relief,” said James Sayre, agricultural economist at the University of California, of the most recent Canadian tariffs. “…Just thinking about the dairy sector, I think they are going to be hurt.”
California’s dairy and dairy product exports were valued at $2.6 billion in 2024, the third-highest valued export in the state, according to the most recent data from the California Department of Food and Agriculture.
In 2024, Canada was California’s second-largest dairy and dairy product export market, representing 15% of all dairy goods exported, the state agriculture department data shows. American dairy exports to Canada have soared over the last 10 years, according to U.S. Department of Agriculture data.
Lynne McBride, executive director of California Dairy Campaign, a member organization of the California Farmers Union, said she thinks the latest tariffs will have a “minimal impact” on U.S. milk prices but is concerned for dairy farmers. A top issue for her, she said, is that U.S. milk prices are “well below” production costs.
Read more Newsom appoints veteran judge Katherine Lucero to Yolo Superior Court
“Under our system, small changes in supply or demand could potentially have a significant negative impact (on dairy farmers),” McBride said, suggesting that Canadian demand for American milk could go down.
Becky Rasdall Vargas, senior vice president of trade and workforce policy for Washington-D.C.-based International Dairy Foods Association, said in a statement that the tariff war will not settle broader trade issues around America’s longstanding trade pact, known as USMCA, with Canada and Mexico.
“IDFA encourages both governments to return to negotiations and de-escalate these trade actions. The newly announced Canadian tariffs add further uncertainty for U.S. dairy exporters and underscore the importance of stable, predictable access to global markets,” Rasdall Vargas said.
While called out as a “targeted sector” by the Canadian government in its messaging on the tariffs, agricultural equipment is not something that will be affected greatly in California, according to the North American Equipment Dealers Association. The association mostly represents larger manufacturers focused on commodities grown in the Midwest, the area where the majority of agricultural equipment is made, the group said.
A main sticking point in the U.S.-Canadian trade negotiations have been Canada’s restrictions on U.S. alcohol. Only two of Canada’s 10 provinces, Alberta and Saskatchewan, are still selling American alcoholic beverages. Those provinces represent smaller markets compared to those in Canada’s largest provinces, Ontario and Quebec.
Canada was America’s top wine export market, representing 36% and 460 million dollars-worth of all U.S. wine exports in 2024, according to Sacramento-based Wine Institute. In 2025, Wine Institute data shows that exports to Canada fell to 12%, a $357 million loss in export value.
Canadian Prime Minister Mark Carney recently asked the country’s provinces to lift their bans. The Los Angeles Times reported that the provincial leaders agreed. Then trade talks with the U.S. fell apart.
“We are disappointed that an agreement has not yet been reached to end what has been the most significant market disruptions for the U.S. wine industry in generations,” said Steve Gross, CEO and president of Wine Institute. “We urge both governments to continue negotiations and work toward a resolution without further delay.”
For consumers, the latest agricultural tariffs shouldn’t cause alarm, according to Sayre of UC. The U.S. has federal regulations known as milk marketing orders that keep milk prices more stable compared to other commodities.
But further trade talks loom, which have the ability to destabilize the economy much more.
“This is a very small sliver of what a trade war could start to look like if we were to rip up USMCA,” Sayre said. “…Is this the start of something sort of bigger?”
Read more Containment drops as Timber Fire grows to nearly 18,000 acres in Big Sur