At 2025 volumes, Canada’s 25% and 50% surtaxes would cost U.S. cheese and whey exporters up to US$6.21 million a month in duty. Since Sept. 29, eight lines of Canadian whey can’t enter the U.S. at any price. Ottawa’s chief negotiator says there’s no date to restart talks.
We don’t know exactly when that’s going to happen,” Canada’s chief trade negotiator Janice Charette said Oct. 22 of formal talks with Washington. That makes time the variable that matters. At 2025 trade volumes, Canada’s surtaxes would carry up to US$6.21 million a month in duty on U.S. cheese and whey, before any relief. Run from Sept. 8 through Oct. 31, that’s about US$11 million (Bullvine math). Washington’s measure on Canadian whey isn’t a rate at all. Since 12:01 a.m. Eastern on Sept. 29, eight covered whey lines can’t enter the U.S., and paying duty doesn’t change that.
Canada’s surtaxes have been in force since Sept. 8, with no end date and no date to restart talks. At 2025 volumes, that’s up to US$6.21 million a month in duty on U.S. cheese and whey. That’s about US$11 million through Oct. 31 (Bullvine math: 54 days at the monthly rate). Washington answered with a ban, not a rate. Since 12:01 a.m. Eastern on Sept. 29, covered Canadian whey can’t enter the U.S. at any price, and no duty payment changes that.
Canada’s Dairy Surtax Cost per Month
All trade values are in USD and show exposure, not realized loss. Census is scheduled to release September trade data on Nov. 4, 2026. Monthly customs data replaces these cells as each month posts.
U.S. dairy exports to Canada (Canadian surtax since Sept. 8)
| Product (HS) | 2025 monthly trade | Rate | Estimated monthly duty |
| Cheese (0406) | $11.17M | 25% | $2.79M |
| Whey and milk constituents (0404) | $6.83M | 50% | $3.42M |
| Casein and caseinates (3501)† | $1.75M | 50% | $0.88M (ceiling) |
| Milk powders, concentrated milk (0402)† | $1.42M | 50% | $0.71M (ceiling) |
| Selected headings subtotal | $21.17M | $7.79M |
Source: UW–Madison Extension, Table 1 (2025 customs values reported by Canada to UN Comtrade), updated Sept. 30, 2026. Monthly figures and duties are Bullvine math: annual ÷ 12 × statutory rate, before any Duties Relief or Drawback.
Cheese and whey carry US$6.21 million of that (Bullvine math). “Whey” here means all of heading 0404, milk constituents included. Finance Canada’s list covers every 0404 and 0406 tariff item in Canada’s 2026 Customs Tariff. It covers only part of the casein and milk-powder headings. UW–Madison counts those two as fully tariffed, so Bullvine marks them as ceilings and keeps them out of the headline number.
The Canadian Dairy Exports the U.S. Banned
Canadian dairy exports to the U.S.
| Product (HS) | 2025 monthly trade | U.S. measure | Monthly exposure |
| Whey and modified whey (0404.10) | $2.92M [GATS: VERIFY] | Excluded since Sept. 29 (eight lines) | Up to $2.92M of trade blocked (ceiling) |
| Remaining 0404, incl. milk constituents/MPC | ~$2.83M (Bullvine math) | 50% | ~$1.42M duty |
| Milk powders (0402)† | $0.67M | 50% (per UW–Madison) | $0.33M duty |
| Quantified subtotal | $6.42M | ||
| Cheese (0406), not quantified | $7.58M | Unconfirmed (see below) | Not calculated |
Whey line: USDA FAS GATS, U.S. imports from Canada, 2025, ÷ 12 (Bullvine math). Remaining 0404: UW–Madison’s US$69M for all of heading 0404 (Canada-reported) minus the GATS 0404.10 figure (U.S.-reported), ÷ 12. The two reporters don’t match, so treat it as approximate.
Proclamation 11062 bars eight eight-digit lines inside 0404.10, so US$2.92 million is a ceiling for the banned subset. Covered goods that landed before Sept. 29 but weren’t yet entered still pay the 50% duty. The proclamation says Canada “reneged on its commitment” on Aug. 21; that’s Washington’s claim, not a finding.
Cheese. UW–Madison reports the U.S. added Canadian cheese to its 50% list effective Sept. 15. CBP’s Sept. 11 guidance (CSMS 69851916) lists Sept. 15 changes under the alcohol and motor-vehicle proclamations only. It says there are “no changes” under heading 9903.03.13. Proclamation 11062 cites a separate Sept. 8 dairy scope proclamation, but Bullvine hasn’t found its annex (checked Oct. 23, 2026). Bullvine leaves cheese out of the count until that annex turns up.
What It Means for the U.S. Milk Check
UW–Madison runs the effect through cheese and whey prices into Class III. Its anchor is roughly US$0.20–$0.35/cwt “for a sustained action,” inside a planning range of US$0.10–$0.50/cwt. On 240 cwt per cow a year, Bullvine’s math puts that at US$24–$120 per cow per year. That’s a different shipping basis from earlier Bullvine pieces.
That range covers Canada’s surtax alone. UW says the U.S. and Canadian whey measures “pull in opposite directions for U.S. prices” and doesn’t net them. Bullvine’s Sept. 14 modeling put the ban’s possible Class III lift at +11.9¢ to +59.6¢/cwt. Even the bottom of that could more than cover UW’s 10¢ low case. Nobody has published the net, so a budget that books the 10¢ hit as certain is booking only one side of the border.
The duty is customs dollars on trade crossing the border. A farm’s exposure is cwt shipped times the price change per cwt, and one number doesn’t convert into the other.
What to Do Now
- U.S. producers: Run UW–Madison’s range against your own shipments, then check whether your budgeted milk price holds through the anchor band. A Class III or dry whey move doesn’t by itself prove the tariffs caused it.
- Canadian producers: Watch upcoming board and pool settlements for changes to prices, incentives, production days or deductions. Also watch whether the board attributes any change to trade. No published source yet establishes a Canadian farm-gate effect, and the settlement statement is where one would show first.
- Importers: Have your broker confirm whether any covered Canadian product you hold qualifies under the pre-Sept. 29 provisions. After the cutoff, CBP bars covered product from foreign-trade zones, bonded warehouses, in-bond moves and entry for consumption.
- Lenders: Stress cash flow month by month at US$0.10/cwt and again across the anchor band.
- Exporters and co-ops: Track quantities alongside values, since a drop in dollars can be price, volume or both. October is the first full month under the whey ban; September mixes three effective dates.
Key Takeaways
- US$6.21M a month in Canadian duty on U.S. cheese and whey at 2025 volumes. That’s about US$11M from Sept. 8 through Oct. 31 (Bullvine math).
- US$7.79M a month is a ceiling, not the bill, because casein and milk powders are only partly listed.
- Up to US$2.92M a month of Canadian whey blocked outright since Sept. 29. That’s a ceiling for the eight banned lines.
- The U.S. duty on Canadian cheese is unconfirmed. CBP’s Sept. 15 guidance doesn’t list a dairy scope change.
Run Your Numbers
Plug your monthly cwt and component tests into the Component Value Tracker to see UW–Madison’s $/cwt range on your own milk.
Milk Revenue Stress Test
Calculate your farm’s monthly revenue exposure based on the UW–Madison trade dispute price scenarios.
Data Notes
Sources and method:
- Trade values: UW–Madison Extension, Table 1, updated Sept. 30, 2026; USDA FAS GATS for 0404.10.
- Monthly values and duties: Bullvine math (annual ÷ 12 × statutory rate), before any Duties Relief or Drawback.
- Canadian rates and tariff items: Finance Canada’s counter-tariff list, with coverage checked against the CBSA Customs Tariff, Chapters 4 and 35 (2026), on Oct. 23, 2026.
- U.S. measures: Federal Register 2026-18836 and CBP CSMS 69851916, both opened Oct. 23, 2026.
Ceiling: the full heading’s 2025 trade times the statutory rate, used where only part of the heading is listed. The true figure is lower.
† 0402 (U.S. exports to Canada): Finance Canada lists 10 of the 14 tariff items in the heading. 0402.29.11, .12, .21 and .22 aren’t listed.
† 3501 (U.S. exports to Canada): Only 3501.10.00 (casein) is listed. 3501.90.00 (caseinates and other) isn’t, but UW–Madison’s US$21M includes it.
† 0402 (Canadian exports to the U.S.): The 50% rate comes from UW–Madison. Bullvine hasn’t opened the Proclamation 11047 Annex II line list.
Timeline:
- July 20: Proclamation 11047 sets 50% duties, effective Aug. 19.
- Aug. 18: Proclamation 11056 suspends them for three days.
- Aug. 22, 12:01 a.m. Eastern: the suspension lapses and the 11047 duties take effect.
- Sept. 8: Canadian surtaxes take effect.
- Sept. 15: CBP implements alcohol and vehicle scope changes. The dairy change is unconfirmed.
- Sept. 29, 12:01 a.m. Eastern: the whey exclusion under Proclamation 11062 takes effect.
Learn More
- New 25% Border Tax Hits Dairy Trade: What It Means For Your Farm — Breaks down the immediate financial shock of the $856 million cross-border disruption. Arms you with specific steps to track your Class III exposure, tighten your 2025 production costs, and shield your farm’s bottom line against impending market volatility.
- USMCA 2026: The $200M Question – Why Only 42% of U.S. Dairy Access to Canada Gets Used — Exposes the hidden regulatory loopholes keeping over half of negotiated American export quotas completely empty. Connects the dots on how the upcoming trade review dictates processor expansion and what questions you must ask your co-op leadership right now.
- Dairy Showdown: Canadian Quotas vs. American Free Market — Dismantles the prevailing myths dividing North America’s opposing agricultural systems. Contrasts the brutal margin volatility driving US mega-dairies toward massive automation against the stagnant innovation inside Canada’s protected quota fortress to reveal who actually survives the next decade.
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