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The renegotiated trade agreement between the U.S., Mexico and Canada is of little use to the dairy farmers President Donald Trump insisted on helping, Federal Reserve banks in the Midwest are reporting
Gains from the new agreement are seen as "too small and too far in the future to help dairy farmers," the Chicago Fed reported in the central bank's periodic report on economic conditions across its 12 districts.
The Minneapolis Fed reported that "a substantial number of dairy operations have exited the business since the beginning of the year." The report, called the "Beige Book," was released Wednesday.
Trump had pressed hard to get Canada to make concessions to American dairy farmers as part of the renegotiation of the agreement known as NAFTA, even threatening to leave Canada out of a tentative deal the U.S. had already struck with Mexico.
Before, U.S. dairy farmers faced strict import quotas and tariffs. Under the new agreement, which still needs to be approved by Congress, Canada agreed to drop restrictions, allowing U.S. producers to supply up to 3.6 percent of Canada's dairy market.
Even so, the Chicago Fed reports "dairy farmers continued to struggle," and Canada and Mexico kept their tariffs on pork, dairy and other agricultural products that they imposed in retaliation for Trump's tariffs on steel and aluminum products imported to the U.S.
Trump had hoped to boost GOP support among the farmers and workers in the upper Midwest for the upcoming midterm elections. Enough congressional seats are up for grabs to tilt the power back to Democrats, particuarly in the House of Representatives.