By most accounts, NAFTA negotiations are going poorly.  Once unthinkable, the end of our most important trade agreement is frighteningly possible.The United States has long had their NAFTA demands on the table – from changes to the dispute settlement mechanism to ending the massive border tariffs Canada places on US dairy products.Canada's response has been to characterize these changes as crossing “red lines” – meaning things that cannot be accommodated in a revised agreement.  Prime Minister Justin Trudeau has upped the ante suggesting Canada is “willing to walk away from NAFTA” and “won't be pushed around.”  This may be a bluff, but it is starting to look more like a hard position.Unless there is a major change in US demands, we are barreling towards an impasse that may result in President Trump pulling out of the agreement.  There is much debate about how far the President can go without Congress – but two things are clear – Congress is largely protectionist anyway and trade chaos will follow.Post-NAFTA, much of Canada-US trade would be governed by World Trade Organization agreements, and at least initially, would be subject to medium-pain tariff increases for products like beef, pork and canola oil.  These costs will be passed onto Canadian farmers.  But that is unlikely to remain the case for long.It is unlikely that Trump will then back down on the trade agenda that was essential to his electoral victory.  Given his record so far, the opposite is much more likely.  He will punch harder.  Especially in areas where Canadian action is off-side with “free and fair” trade – as is the case with Canada's massive regime of tariffs on foreign dairy, poultry and eggs.The US could further target our big, unprotected oil seed and red meat sectors with measures deamed equivalent to those leveled on their milk, poultry and eggs.  They could require Canadian wheat to be segregated in their grain handling sector, as we do with US wheat.In fact on Monday, President Trump threatened a “reciprocal tax” and singled out Canada as the target: “Canada does not treat us right in terms of the farming and the crossing the borders.”This threat is not only dangerous, it is realistic. A whole range of inventive barriers can easily be constructed in Washington that would squeeze out billions and billions in Canadian exports.Even though Canada could seek remedy in Geneva, the process would be slow and market prices for our agricultural goods would drop significantly.  Meanwhile, Washington would start crafting another round of new restrictions.The impact on Canadian farmers would be devastating.American politicians would do this in the name of ensuring a favourable American agri-trade surplus, putting American farmers first, and ultimately to inflict real pressure on Ottawa to eliminate supply management.  Canada's export agriculture sector cannot win this war.There is another path Canada could take to avoid this confrontation before it spirals out of control.  We could propose a compromise that is in keeping with our free trade rhetoric.Canada could focus on its true “red lines” like maintaining the dispute settlement mechanism.  But show good faith by ending its tariffs and non-tariff barriers on US agricultural products.After all, our huge tariffs on dairy, poultry and eggs have harmed our ability to gain full market access for Canadian export agriculture in countless other trade negotiations.  Witness Canada's tiny beef access quota in the EU trade deal.They also harm Canadian consumers by forcing them to pay as much as double for these products.  Estimates are that low-income families with children pay up to $592 more per year in higher grocery bills.When it comes to Canadian agriculture, supply management is the outlier.  Ninety-two percent of Canadian farmers are behind Canada's status as the world's fifth-largest agricultural exporter.  We export half of our beef, three quarters of our pork and ninety percent of our canola. Free trade is essential to the growth and success of the overwhelming majority of Canadian farmers.Are Canadian politicians willing to sacrifice NAFTA and our market-driven grain and livestock farmers in an effort to placate the dairy lobby?  Let's hope not.  Because if it comes to a post-NAFTA trade war, Canadian agriculture will be the first casualty.Aaron Gairdner is Executive Director of Affordable Milk Canada and previously served as Chief-of-Staff to Canada's Foreign Minister, Defence Minister and Agriculture Minister.