American spirit exports to Canada took a significant hit in the second quarter of 2025, dropping by 85 percent. The Distilled Spirits Council of the United States expressed deep concern over the situation, attributing the decline to trade tensions that have led international consumers to seek alternatives to U.S.-made products.
The council’s recent report highlighted a 29 percent decrease in exports to the U.K. and a 23 percent drop in exports to Japan. However, the most substantial decline was observed in Canada, a country that accounted for a significant portion of U.S. spirit exports in the past. The council, which represents producers of various spirits like whisky, vodka, rum, and brandy, pointed out that the shift away from American spirits could be due to perceived unfair U.S. tariffs, prompting consumers to support domestic industries or explore non-U.S. products.
The council’s CEO, Chris Swonger, emphasized the immediate negative impact of trade tensions on U.S. spirit exports, urging President Trump to facilitate a return to tariff-free trade with longstanding partners to sustain the industry’s growth.
The Nova Scotia Liquor Corporation reported a surge in local alcohol sales following the removal of American products from shelves. Sales of Nova Scotia spirit products and wine increased by 24.2 percent and 15.1 percent, respectively, compared to the previous year. This trend was echoed by an increase in Canadian wine and whisky sales by 8.9 percent and 8.5 percent, respectively.
Looking ahead, there is anticipation that even if the trade dispute is resolved and American alcohol re-enters the market, some Canadian consumers may continue to prioritize local products out of national loyalty. This sentiment reflects ongoing concerns and a shift towards supporting domestic industries.
The impact of the trade tensions on the alcohol industry has been widespread, with companies like Brown-Forman, parent company of well-known brands like Jack Daniel’s and Woodford Reserve, experiencing a 62 percent drop in sales to Canada during the first fiscal quarter of 2026. CEO Lawson Whiting highlighted the challenges posed by the trade dispute, emphasizing the need to navigate these headwinds effectively.
As negotiations continue between Canadian and American officials to address tariff issues, industry experts anticipate a shift in consumer behavior towards supporting local products and maintaining a sense of national loyalty amidst the evolving trade landscape.