One year later, Trump tariffs hit U.S. spirits exports hard - The Courier-Journal

A trade dispute led Canadian provinces to remove U.S. spirits from shelves a year ago.

U.S. spirits exports to Canada dropped from $203 million in 2024 to $60 million in 2025.

Most Canadian provinces continue to ban U.S. alcohol products despite the lifting of retaliatory tariffs.

Kentucky distillers, like Brown-Forman, have reported significant sales slumps due to the trade war.

March 4 marks one year since provinces across Canada removed U.S.-made spirits from its shelves in response to tariffs enacted by President Donald Trump — leaving many Kentucky distillers without access to one of their largest trading partners.

While the tariff situation remains muddled as the Supreme Court ruled Feb. 20 that President Trump lacks the authority to impose broad sweeping tariffs under the International Emergency Economic Powers Act, including the 35% tariffs imposed on Canada in March 2025, Trump has pressed on, saying he intends to continue utilizing tariffs on foreign trade partners.

In retaliation Canada, which was the second-largest market for U.S. spirits exports in 2024, imposed a 25% tariff on all U.S. beverage alcohol products, which began March 13, 2025 and was eventually lifted in August.

Currently, U.S. tariffs are suspended on imports from Canada, including spirits produced in the country, that comply with the U.S.-Canada-Mexico Agreement. However, according to the Distilled Spirits Council of the United States, "Most Canadian provinces continue to ban U.S. alcohol products from retail stores. Two provinces, Alberta and Saskatchewan, have since put U.S. spirits back on their shelves."

Full year exports from the U.S. to Canada in 2025 crested at $89 million, down nearly 63% from 2024 — dropping Canada's status to the sixth-largest export market in 2025, DISCUS reported. Meanwhile, DISCUS found that in 2025, the U.S. imported $691 million worth of Canadian spirits, up nearly 11% from 2024.

"One year after U.S. spirits were removed from retail shelves across Canadian provinces, the damage to American distillers is unmistakable. This policy has caused real and avoidable harm to an industry that has long championed open markets and zero‑for‑zero tariffs with our major trading partners," said Chris Swonger, president and CEO of DISCUS. "We deeply value our Canadian consumers, who have embraced the quality and diversity of American spirits for decades. We urge both governments to come back to the table to restore permanent tariff-free trade and restore Canadian consumers’ access to these iconic American spirits."

Kentucky distillers face sales slump from tariffs

Across Kentucky, bourbon distillers who sell products internationally faced sales slumps and negative financial impacts.

Distillers like Louisville-based Brown-Forman, one of the leading exporters of U.S. spirits globally, with 55% of its net sales coming from outside the U.S., reported decreased sales throughout the tariff trade war, The Courier Journal previously reported. The distiller cited a "challenging" economic environment as part of the reason for the decrease as U.S. tariffs continued to disrupt global markets. The company, which makes brands including Jack Daniels, Woodford Reserve and Old Forester, saw organic net sales decline almost 60% in Canada in the first quarter of FY26, it said during an earnings call in August 2025.

Kentucky politicians, including U.S. Rep. Morgan McGarvey and Sen. Rand Paul, frequently condemned Trump's tariffs noting the immediate and lasting impacts the trade move would have on Kentucky distillers, farmers and residents.

The volatile nature of tariffs in 2025, which included everything from Trump's April 2 "Liberation Day" reciprocal tariffs, which applied varying tariff rates on nearly every nation, to additional tariffs being applied, and then reduced, on various countries around the globe, challenged distillers who export their spirits abroad.

"From bourbon getting wiped off Canadian shelves to Louisville families paying $1,300 more a year just for everyday goods and services, Kentuckians have been footing the bill for this President's reckless, ego-driven trade war," McGarvey said following the Feb. 20 SCOTUS ruling.

Contact Business Reporter Olivia Evans at [email protected] or on X at @oliviamevans_.