What's happened
American distillers face an 85% drop in exports to Canada and declines in key markets due to ongoing trade disputes. Despite Canada's removal of tariffs, many provinces maintain bans, causing exports to fall below $10 million in Q2. The industry warns of long-term damage without tariff relief.
What's behind the headline?
The sharp decline in US spirits exports highlights the vulnerability of American distillers to geopolitical conflicts. Despite Canada's partial tariff removal, provincial bans continue to hinder sales, illustrating how regional policies can undermine national trade efforts. The industry’s call for zero-for-zero tariffs underscores the importance of stable trade relations for global market access. This situation will likely lead to a restructuring of export strategies, with distillers seeking alternative markets or lobbying for policy changes. The long-term outlook depends on whether diplomatic efforts succeed in restoring tariff-free trade, which is crucial for the US spirits sector to recover and remain competitive internationally.
What the papers say
The Independent reports that US distillers are experiencing an 85% decline in exports to Canada, with overall exports falling 9% in Q2 2025. AP News emphasizes that exports to Canada, the only major retaliatory market, plunged below $10 million. Bloomberg notes the 9% drop in US liquors, including bourbon, with the steepest decline in Canada. All sources agree that trade tensions and tariffs have significantly damaged US spirits exports, with industry leaders warning of ongoing risks if tariffs persist. The articles contrast the optimistic 2024 export year with the current downturn, highlighting how geopolitical disputes directly threaten the industry’s growth and stability.
How we got here
Trade tensions initiated by tariffs imposed during Trump's administration have severely impacted US spirits exports. Canada, a major market, removed retaliatory tariffs but still restricts sales in many provinces. Other key markets like the EU, UK, and Japan have also seen declines, reflecting broader international trade disruptions.
Go deeper
Common question
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Why Are US Liquor Exports to Canada Dropping So Much?
US distillers are facing a sharp decline in exports to Canada, with an 85% drop reported recently. This decline raises questions about what caused it, how trade disputes and tariffs play a role, and what it means for consumers and the industry. Below, we explore the key reasons behind this trend and what might happen next.
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