Canada's dairy policies not to blame for hit to US dairy farmers

Canada's envoy to Washington has returned fire just hours after U-S President Donald Trump and American milk producers declared war on the Canadian dairy industry.

Ambassador David MacNaughton says in a letter to the governors of Wisconsin and New York that the facts don't support the contention that Canada's dairy policies are the cause of financial losses for dairy farmers in the United States.

He says Canada has done nothing to block U-S imports and that an ``over-saturated'' U-S market that has led to lower prices.

Dairy producers in both states say Canada's decision to impose import taxes on ultra-filtered milk, a protein liquid concentrate used to make cheese, has unfairly hurt them.

Trump launched his broadside after a brewing trade spat that has seen the U-S dairy lobby accuse Canada of ``systemic disregard'' of its trade obligations, while the Canadian industry accused its American rival of ``scapegoating.''

Trump also signalled he wants to do more than simply tweak NAFTA, saying he is looking for ``very big changes'' to the trilateral pact that includes Mexico, or else he will scrap it once and for all.

Trump levelled the threats during an event at a Wisconsin factory where he unveiled his ``Buy American-Hire American'' executive order.