Anaya Nolan
Several sources claim that former US President Donald Trump's trade policies made it difficult for the US to import baby formula from Canada. In July 2020, the US entered into the United States-Mexico-Canada Agreement (USMCA), which imposed an increased surcharge per kilogram of formula imports from Canada. This, coupled with Trump's imposition of tariffs on Canadian imports, is said to have contributed to the baby formula shortage in the US. However, it's important to note that global imports typically account for only about 2% of baby formula consumption in the US, and other factors, such as supply chain issues and FDA approval processes, also play a role in the shortage.
| Characteristics | Values |
|---|---|
| Did Trump pass a law stopping formula purchase from Canada? | No, but Trump's USMCA trade deal made it harder to import infant formula from Canada. |
| Reason for the deal | To protect U.S. exports of dairy products. |
| Impact of the deal | The U.S. imported virtually no baby formula from Canada in 2021. |
| Global imports of baby formula consumption in the U.S. | 2% |
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What You'll Learn
- Trump's USMCA deal made it hard to import formula from Canada
- The USMCA deal was to protect US exports of dairy products
- The US imported virtually no baby formula from Canada in 2021
- The USMCA deal led to an increased surcharge per kilogram
- The US can import baby formula, but global imports make up 2% of consumption
Trump's USMCA deal made it hard to import formula from Canada
In July 2020, the United States-Mexico-Canada Agreement (USMCA) was signed into law by the Trump administration. This agreement established specific rules for importing baby formula from Mexico and Canada. The USMCA deal included an increased surcharge per kilogram of formula imported from Canada, which discouraged imports.
As a result of the USMCA deal, the US imported virtually no baby formula from Canada in 2021. This is in stark contrast to the US-Canada dairy trade, in which US-manufactured infant formula accounted for 22% of all exports to Canada. The USMCA deal has been criticised for making it difficult for the US to import infant formula from Canada, which some argue has contributed to the current baby formula shortage in the US.
Some commentators have placed blame on Trump for the baby formula shortage, arguing that the USMCA deal has made it ""virtually impossible" to import infant formula from Canada. However, others have argued that claiming the USMCA deal is the sole reason for the inability to import baby formula from Canada is an oversimplification of the issue. It is important to note that global imports typically only account for about 2% of all baby formula consumption in the US.
While the USMCA deal may have contributed to the baby formula shortage, it is important to consider other factors as well. Dealing with supply chain issues is complex and involves navigating FDA approval processes and standards, which differ from those in Europe. Additionally, the baby formula shortage in the US has also been impacted by product recalls and production shutdowns due to contamination issues.
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The USMCA deal was to protect US exports of dairy products
The United States–Mexico–Canada Agreement (USMCA) was signed in 2020 during Donald Trump's presidency. The agreement was intended to advance US agricultural interests in the most important markets for American farmers, ranchers, and agribusinesses. The USMCA was also meant to open new markets to expand US food and agricultural exports and support food manufacturing and rural jobs.
Canada and Mexico are the first and third-largest export markets for US food and agricultural products, making up 28% of total food and agricultural exports in 2017. These exports support more than 325,000 American jobs.
The USMCA created new market access opportunities for US exports to Canada of dairy, poultry, and eggs. In exchange, the US would provide new access to Canada for dairy, peanuts, processed peanut products, and limited sugar and sugar-containing products.
Canada has long maintained steep tariffs on dairy products, considering trade protection essential to its national interests. The USMCA dispute settlement mechanism has been found to work effectively and efficiently to resolve trade disputes.
While the USMCA renegotiated agreement is an improvement, there are still barriers to trade. The underlying motivation for the agreement was to explain why several dairy import categories could have unfilled tariff rate quotas (TRQs) when US dairy product prices are generally much lower than Canadian domestic prices.
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The US imported virtually no baby formula from Canada in 2021
The United States imported virtually no baby formula from Canada in 2021. This was a result of the United States-Mexico-Canada Agreement (USMCA), a trade deal signed under President Donald Trump's administration. The USMCA imposed tariffs on Canadian goods, including baby formula, making it expensive and difficult to import.
The USMCA deal included an increased surcharge per kilogram for formula imports from Canada. This, along with other regulatory requirements, made it virtually impossible for the US to import infant formula from Canada. The USMCA deal was intended to protect US exports of dairy products and limit baby formula production in Canada.
The USMCA is not the only factor contributing to the baby formula shortage in the US. Supply chain issues, ingredient availability, labor shortages, and the shutdown of Abbott Laboratories' plant over contamination concerns have also played a role. The US typically produces 98% of the infant formula it consumes, but the recent shortages have highlighted the need for alternative sources.
The US Food and Drug Administration (FDA) has strict requirements for the sale of infant formula in the country, including labeling and nutrient standards. These standards differ from those in other countries, and some European formulas are included on an FDA "red list" of goods that must be seized due to non-compliance. However, parents can import formula for personal use. The FDA's rigorous standards have made it challenging to quickly replenish stocks of baby formula in the US.
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The USMCA deal led to an increased surcharge per kilogram
In July 2020, the United States entered into the United States-Mexico-Canada Agreement (USMCA) during Donald Trump's presidency. The USMCA deal established specific rules for importing baby formula from Mexico and Canada. However, the deal also included an increased surcharge per kilogram, which discouraged formula imports from Canada.
The surcharge was part of a partisan agreement to protect US exports of dairy products. According to a CBC News reporter, Alexander Panetta, the USMCA deal included tariffs on Canada to limit baby formula production in the country. As a result of the increased surcharge, the US imported virtually no baby formula from Canada in 2021. In contrast, US-manufactured infant formula accounted for 22% of all dairy trade from the US to Canada.
The USMCA deal has been criticised for making it difficult for the US to import infant formula from Canada, contributing to the current baby formula shortage in the country. Political commentator Brian Tyler Cohen shared a clip of Senator Rick Scott, who stated that Canada has "plenty of baby formula," and attributed the US formula shortage to Trump's USMCA trade deal. Similarly, Jon Cooper, a prominent Barack Obama fundraiser, tweeted that Trump's administration is to blame for the formula shortage due to the USMCA deal making it virtually impossible to import infant formula from Canada.
While global imports typically account for only about 2% of all baby formula consumption in the US, the USMCA deal's impact on formula imports from Canada has led to an increased surcharge per kilogram, affecting the availability and accessibility of infant formula in the US market.
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The US can import baby formula, but global imports make up 2% of consumption
The United States experienced a severe shortage of infant formula in 2022. This was due to the 2021–2022 global supply chain crisis, compounded by a large-scale product recall after two babies allegedly died from consuming Abbott infant formula, import restrictions, and market concentration. The USMCA (United States-Mexico-Canada Agreement) has been blamed for the shortage, as it made it difficult for the US to import infant formula from Canada.
The USMCA, a Trump-era trade agreement, established specific rules for importing baby formula from Mexico and Canada. It imposed new restrictions on imports of formula from Canada and limited how much baby formula Canada could export globally each year. If Canadian businesses export more than 40,480 metric tons collectively, they are subject to an export charge of $4.25 (Canadian dollars) per kilogram. The US didn't import any baby formula from Canada in 2021.
However, global imports usually only make up about 2% of all baby formula consumption in the US. Importing baby formula into the US is allowed but uncommon. The USMCA did make some changes to how baby formula is imported into the US, but many other regulatory policies affect imports, too. The trade agreement is not the only barrier to the US importing more formula.
The FDA also prohibits the import (for commercial purposes) and sale of formula from Europe, even though many European formulas meet or exceed FDA nutritional guidelines. This is because their nutritional labelling does not conform to US requirements. Ninety percent of the formula in the United States is made by just four companies, including Abbott Nutrition, which manufactures 43% of US infant formula.
To address the shortage, President Biden announced that he would invoke the Defense Production Act to speed up domestic manufacturing of infant formula. He also launched "Operation Fly Formula" to fly in infant formula from overseas. The White House stated that the FDA would soon announce steps to accelerate imports from Mexico, Chile, Ireland, and the Netherlands.
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Frequently asked questions
Yes, Trump's USMCA trade deal made it almost impossible to import baby formula from Canada.
USMCA stands for United States-Mexico-Canada Agreement. It was implemented in July 2020.
In 2021, the US imported virtually no baby formula from Canada after entering the USMCA deal.
