Understanding the Current Canadian Tariffs on Imported US Chicken- A Comprehensive Overview

What is the Canadian Tariff on US Chicken?

The Canadian tariff on US chicken has been a topic of considerable interest and debate in recent years. This tariff, which imposes additional costs on imported chicken from the United States, has significant implications for both the Canadian and American poultry industries. Understanding the details of this tariff is crucial for anyone involved in the trade of chicken between these two neighboring countries. In this article, we will delve into the specifics of the Canadian tariff on US chicken, its origins, and its impact on the market.

The Canadian tariff on US chicken, officially known as the “Chicken Tariff Rate Quota” (CTMQ), was implemented in 1986. This quota system was established to protect the domestic Canadian poultry industry from what the Canadian government perceived as unfair competition from the United States. Under the CTMQ, Canada imposes a tariff on chicken imports from the United States, but allows a certain amount of chicken to enter the country duty-free. The amount of duty-free chicken is determined annually based on historical trade patterns.

The tariff rate for US chicken entering Canada is quite high, ranging from 10% to 24% depending on the type of chicken. This additional cost makes US chicken more expensive for Canadian consumers and businesses compared to domestically produced chicken. As a result, the domestic Canadian industry enjoys a competitive advantage in the market.

The origins of the Canadian tariff on US chicken can be traced back to the 1970s when the Canadian government became concerned about the growing dominance of the American poultry industry. In response, the government introduced the CTMQ to safeguard the interests of the domestic industry. Over the years, the quota has been adjusted to reflect changes in trade patterns and to address concerns from the American poultry industry.

The impact of the Canadian tariff on US chicken has been a point of contention between Canada and the United States. American poultry producers argue that the tariff is protectionist and violates international trade agreements. They claim that the high tariffs have led to a significant loss of market share for US chicken in Canada, resulting in job losses and economic hardship for American poultry farmers.

On the other hand, Canadian poultry producers argue that the tariff is necessary to protect their industry from what they perceive as unfair competition from the United States. They contend that the high tariffs help maintain a level playing field and ensure the long-term viability of the Canadian poultry industry.

In recent years, there have been efforts to negotiate a new agreement that would reduce or eliminate the Canadian tariff on US chicken. In 2019, the United States and Canada reached a preliminary agreement on a new trade deal, which included provisions aimed at reducing the tariff. However, the finalization of the agreement has been delayed due to ongoing negotiations and disputes over other aspects of the deal.

In conclusion, the Canadian tariff on US chicken is a complex issue with significant implications for both countries’ poultry industries. Understanding the origins, the impact, and the ongoing negotiations surrounding this tariff is essential for anyone interested in the trade relationship between Canada and the United States. As negotiations continue, the future of the Canadian tariff on US chicken remains uncertain, and the outcome will likely have a lasting impact on the market.