The International Dairy Foods Association (IDFA) has urged the United States government to address foreign trade policies that it believes could disadvantage American dairy manufacturers, processors, and exporters. In two separate submissions to the Office of the United States Trade Representative (USTR) and the US International Trade Commission (USITC), the organisation outlined concerns regarding regulatory requirements and pricing mechanisms in the European Union (EU) and Canada.
The submissions highlight potential cost increases for US dairy manufacturers, barriers to international market access, and competitive disadvantages arising from foreign government policies. IDFA is calling for greater scrutiny of these measures while recommending transparent and evidence-based procedures for evaluating policies that may discriminate against American commercial interests.
EU Carbon Regulations Raise Concerns Over Dairy Manufacturing Costs
In its submission to the USTR, IDFA raised concerns about the European Union’s Carbon Border Adjustment Mechanism (CBAM), which introduces carbon-related charges on certain imported carbon-intensive goods.
Although dairy products are not directly covered by the mechanism, IDFA argues that its indirect impact could extend to the American dairy processing industry.
US dairy manufacturers frequently depend on specialised machinery, industrial equipment, and components sourced from European suppliers. These systems often incorporate steel and aluminium, materials that could become more expensive if CBAM-related charges affect additional products, components, or machinery.
The association warned that higher equipment procurement costs could eventually be transferred to American dairy manufacturers and customers, increasing investment and operational expenses across the processing sector.
Becky Rasdall Vargas, IDFA senior vice president of trade and workforce, emphasised that policymakers should consider the wider implications of European carbon regulations for international manufacturing supply chains.
The association has previously expressed concerns about EU regulatory requirements, particularly corporate due-diligence obligations and auditing procedures that it says increase compliance costs for American dairy processors and farmers.
IDFA Recommends Transparent Procedures Under Section 338
In a separate submission to the USITC, IDFA recommended establishing transparent, consistent, and evidence-based procedures for identifying foreign trade policies that may discriminate against US commerce.
The commission had requested industry input on how to define discriminatory or unreasonable foreign government actions under Section 338 of the Tariff Act of 1930.
Section 338 provides the US president with authority to impose additional duties of up to 50% on imports from countries determined to have discriminated against US commerce.
IDFA believes that the implementation of this provision should follow clear standards and safeguards to ensure predictable international trading conditions.
The organisation also stressed that trade enforcement measures should be supported by documented evidence and consistent evaluation procedures rather than creating uncertainty for manufacturers and exporters.
Canadian Milk Pricing System Becomes a Trade Concern
Canada’s dairy pricing framework was another major issue identified in IDFA’s submissions.
The association raised concerns about Canadian milk-class pricing policies, arguing that certain pricing arrangements result in below-cost-of-production prices for specific milk proteins and non-fat milk solids.
According to IDFA, these arrangements can make commercially viable US dairy ingredients and products less competitive in the Canadian market.
Milk proteins and non-fat milk solids are important ingredients for dairy processors producing cheese, nutritional products, beverages, and other value-added dairy products.
Differences in pricing structures can therefore influence ingredient procurement decisions, manufacturing costs, and the competitiveness of imported dairy products.
IDFA argues that these policies should be considered when evaluating whether foreign trade practices create disadvantages for American dairy exporters.
EU and Canadian Policies Under Wider Trade Scrutiny
The association identified several foreign regulatory measures that could affect US dairy competitiveness.
| Country or region | Policy or mechanism | IDFA’s concern |
|---|---|---|
| European Union | Carbon Border Adjustment Mechanism | Potential indirect increases in machinery and equipment costs |
| European Union | Corporate Sustainability Due Diligence Directive | Additional compliance and auditing expenses |
| Canada | Milk-class pricing policies | Reduced competitiveness of certain US dairy ingredients |
| United States | Section 338 of the Tariff Act of 1930 | Framework for addressing discriminatory foreign trade practices |
These concerns reflect the growing importance of trade regulations, environmental compliance, and agricultural pricing mechanisms in shaping international dairy manufacturing and export competitiveness.
Predictable Trade Conditions Important for US Dairy Exporters
IDFA welcomed the US administration’s efforts to use available trade mechanisms to strengthen American manufacturing. However, it emphasised that enforcement should operate within a predictable regulatory framework.
Rasdall Vargas stated that measures addressing foreign policies affecting US competitiveness should also incorporate transparent procedures and safeguards that provide stability for dairy businesses.
For the American dairy industry, the outcome of these submissions could influence future trade discussions involving dairy ingredients, processing equipment, manufacturing costs, and access to international markets.
As global dairy trade becomes increasingly interconnected, the relationship between environmental regulations, domestic pricing policies, and international competitiveness will remain an important consideration for processors and exporters.
The IDFA submissions underline the industry’s position that trade policies should account not only for finished dairy products but also for the equipment, ingredients, and supply chains that support dairy manufacturing.
