Exports of American alcohol products have seen a “significant downturn” amid “ongoing trade tensions,” a U.S. distillers trade group says in a new report, with Canadian exports plummeting far more than any other international market.
The mid-year report from the Distilled Spirits Council, released Monday, says U.S. booze exports to Canada are down a staggering 85 per cent in the second quarter compared to the year before, falling below US$10 million.
By comparison, exports to both the United Kingdom and Japan are down just 23 per cent, while exports to the European Union fell by 12 per cent.
“This trend presents a growing challenge for the U.S. spirits industry,” the report says. “International consumers appear increasingly inclined to substitute U.S. spirits with domestic alternatives or imports from other countries.
“This shift may reflect a broader sentiment that U.S.-imposed tariffs are unfair, prompting consumers to support their domestic industries or seek non-U.S. products in response.”
Provinces and territories pulled American alcohol products from government-run liquor store shelves in early March in retaliation after U.S. President Donald Trump first imposed his sweeping tariffs on Canada. Liquor boards also stopped ordering new U.S. product.
Although Alberta and Saskatchewan have since lifted their moratoriums, the other provinces and territories told Global News in August they are either keeping unsold American products in storage or allowing stores to sell through their inventories.
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Some liquor boards confirmed they won’t order more U.S. alcohol until the U.S.-Canada trade war is resolved.
The report notes that in April, sales of Canadian spirits and other imports in Canada rose by 3.6 per cent, while U.S. product sales dropped 68 per cent.
Prime Minister Mark Carney was in Washington, D.C., on Tuesday to meet with Trump, with tariffs and other trade issues set to be top of the agenda.
Asked ahead of the meeting in the Oval Office about Canadians turning their backs on the U.S. by avoiding cross-border travel — which has also seen double-digit drops since the trade war began — Trump said he “understands.”
“It’s something that will get worked out,” he said. “There’s still great love between the two countries.”
An Ipsos poll for Global News released last month found support for the “Buy Canadian” movement remains strong: 56 per cent of respondents said they recently bought Canadian products or investments due to the trade war, while nearly 60 per cent said they went out of their way to avoid American options.
Eighty-two per cent of Canadians said they will continue to prioritize buying Canadian products — even after the trade war is over.
The new report warns American distillers “could face mounting pressure and financial strain” if the trade disruptions continue, pointing to the increased importance for exports amid a stagnating domestic market, particularly for American whiskey.
“With domestic demand slowing, exports represent the most viable path to reducing excess inventory and ensuring the sustainability of American whiskey makers,” the report states.
It says Canada, Japan, the U.K. and the E.U. combined made up 70 per cent of all U.S. spirit exports in 2024, with overall exports “rising more than fivefold since 2000” to over US$2.4 billion in sales last year.
The Distilled Spirits Council in August urged Canadian jurisdictions to return U.S. alcohol to store shelves after Carney announced Canada would lift its retaliatory tariffs on American goods that comply with the Canada-U.S.-Mexico Agreement on free trade (CUSMA).
While the group called the lifting of tariffs “a positive sign,” it added the move won’t have much impact until sales resume.
“The unfortunate decision to remove American spirits from Canadian retail shelves is not only harming U.S. distillers, but it’s also needlessly reducing revenues for the provinces, and placing unnecessary burdens on Canadian consumers and hospitality businesses,” president and CEO Chris Swonger said in a statement.
Spirits Canada has also called on U.S. products to return to liquor stores, arguing the ban is dragging down the entire “highly interconnected” North American industry.
The Canadian group, which works closely with the Distilled Spirits Council, said in July that total spirit sales in Canada fell by 12 per cent — including a six per cent drop for Canadian products — between March and April.
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