And that amount could go higher as the two main US dairy states - California and Wisconsin - deal with the impact of retaliatory tariffs on dairy products from Mexico and China. Dairy also has become an issue in Mexico, the largest market for US dairy products, and farm groups have warned that a 25 percent tariff oncheesewill curb American exports. Daniel Acker / Bloomberg via Getty ImagesOn July 5, Mexico and China put tariffs on $986 million worth of American dairy exports - $408 million worth of cheese to China and $578 million worth of dairy products to Mexico -- as retaliation for the Trump administration's tariffs on imports of steel and aluminum. US dairy exports totaled $5.5 billion last year, including $1.3 billion to Mexico alone, according to the US Agriculture Department. July milk futures have dropped 12 percent since Mexico announced that it would strike back with tariffs, according to dairy industry officials.