IDFA Urges Action Against Foreign Trade Policies That Disadvantage U.S. Dairy

IDFA Urges Action Against Foreign Trade Policies That Disadvantage U.S. Dairy

Comments to USTR and USITC highlight EU CBAM costs, Canada dairy pricing policies and the need for transparent U.S. trade enforcement

WASHINGTON, Nov. 9, 2026 - The International Dairy Foods Association (IDFA) is urging the U.S. government to take stronger action against foreign trade policies that increase costs for American manufacturers, restrict market access and put U.S. dairy businesses at a competitive disadvantage.

In two sets of comments filed with the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (USITC), IDFA outlined how foreign government policies in the European Union (EU) and Canada can undermine the competitiveness of American dairy manufacturers and exporters. IDFA also called for a targeted, transparent and evidence-based approach to protecting U.S. commercial interests and addressing unfair trade practices.

Protecting U.S. Dairy Manufacturers from the Costs of EU Regulations

In comments submitted to USTR, IDFA raised concerns about the potential impact of the European Union's Carbon Border Adjustment Mechanism (CBAM), which applies fees on certain carbon-intensive imports. Although dairy products are not included in the current or proposed CBAM coverage, proposed expansions could affect additional industrial materials and inputs used in dairy-processing equipment.

Many U.S. dairy processors rely on specialized European-made machinery and equipment, sometimes from suppliers with few or no readily available alternatives. If CBAM fees increase the cost of steel and aluminum intensive materials and components used by European manufacturers, those costs could be passed along to U.S. dairy processors, increasing equipment costs and putting additional pressure on American manufacturing.

"If CBAM fees are applied to additional materials, components or machinery, the resulting costs could be passed to U.S. importers and customers," said Becky Rasdall Vargas, IDFA senior vice president of trade and workforce. "Many dairy manufacturers rely on equipment and components from suppliers in Europe, making it critical that policymakers fully consider the impact on U.S. manufacturing costs and supply chains."

IDFA urged USTR to oppose the expansion of CBAM coverage to downstream products and advocate for the continued exclusion of agricultural and food products. IDFA also called for greater clarity and protection under the EU's inward processing provisions to prevent CBAM-related costs from being passed through the supply chain to U.S. businesses.

Addressing Discriminatory Foreign Trade Practices

In a separate filing with the USITC, IDFA also provided recommendations regarding the implementation of Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338), an infrequently utilized authority that allows the U.S. President to impose duties of up to 50% on imports from countries deemed to have discriminated against U.S. commerce.

The USITC requested public input on how it should define "discriminatory" or "unreasonable" actions against U.S. commerce in the future. In response, IDFA's comments highlighted examples of foreign policies that undermine U.S. dairy competitiveness, including Canada's dairy pricing system and EU regulations such as the Corporate Sustainability Due Diligence Directive and CBAM.

IDFA highlighted Canada's milk-class pricing policies which result in below cost-of-production prices for certain milk proteins and nonfat milk solids, making commercially viable U.S. dairy imports less competitive in the Canadian market.

IDFA urged USITC to support transparent, evidence-based procedures for evaluating discriminatory foreign trade policies, protect confidential business information and ensure that any recommended trade remedies are targeted and proportionate to the practices identified.

"IDFA appreciates the Administration's efforts to use all available trade tools to bolster American manufacturing," said Rasdall Vargas. "At the same time, those tools should be applied transparently and with clear standards and safeguards that ensure stable trading conditions for U.S. dairy companies. IDFA supports efforts to address foreign policies that hurt American competitiveness while also establishing a clear and predictable framework for future uses of Section 338."

# # #

Contact: [email protected]

The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation's dairy manufacturing and marketing industry, which supports more than 3 million jobs that generate $198 billion in wages and $779 billion in overall economic impact. IDFA's diverse membership ranges from multinational organizations to single-plant companies, from dairy companies and cooperatives to food retailers and suppliers, all on the cutting edge of innovation and sustainable business practices. Together, they represent most of the milk, cheese, ice cream, yogurt and cultured products, and dairy ingredients produced and marketed in the United States and sold throughout the world. Delicious, safe and nutritious, dairy foods offer unparalleled health and consumer benefits to people of all ages.