American distillers face financial challenges due to Canada’s cold shoulder amid ongoing global trade tensions.
American distillers are facing significant challenges as exports to Canada have plummeted by 85% in recent months, a change attributed to ongoing global trade tensions, according to a report from the Distilled Spirits Council of the United States. This steep decline highlights broader issues affecting U.S. spirits in international markets, which have seen overall exports drop by 9% in the second quarter of 2025 compared to last year.
Despite recent easing of trade relations, many American spirits still remain absent from Canadian shelves. The situation arises after Canada lifted its retaliatory tariffs on U.S. spirits, yet numerous provinces maintain restrictions, preventing U.S. products from gaining market access. Experts note that the consumer backlash related to previous trade disputes could further diminish the demand for American spirits overseas.
The decline in Canadian exports is particularly alarming, as sales fell below million during the April to June quarter. The data reveals a significant downturn in key markets, including the European Union, the United Kingdom, and Japan, all of which are traditionally strong markets for American distillers. Sales of American whiskey, vodka, cordials, and brandy have all experienced double-digit declines, compounding the challenges distillers face amid shifting consumer preferences towards domestically produced spirits.
Chris Swonger, the CEO of the Distilled Spirits Council, expressed concern that prolonged trade tensions could cause consumers to gravitate further away from American brands. Canada has emerged as the sole key trading partner implementing retaliatory measures against U.S. spirits, marking a crucial point in the ongoing trade disputes that have been exacerbated by the previous administration’s tariff policies.
Distillers are advocating for a return to free trade with zero tariffs, which they believe would provide the necessary stability for recovery in international markets. As American whiskey producers grapple with excess supply domestically, access to international markets remains vital for their sustainability. The stagnant U.S. market underscores the urgency for distillers to regain footing abroad, particularly in Canada, where plans for expansion have been derailed.
While larger distillers may weather the trade storm due to their resources and market reach, smaller producers like Bard Distillery in Kentucky have felt the impact more acutely. Their ambitions in Canada, which included expanding their share of the market to represent a significant portion of their sales, have been thwarted by the ongoing trade issues. Recovery will require substantial investment and strategic outreach, but the path to reclaiming lost market share appears arduous. The timeline for potential re-establishment in Canada extends well into next year, reflecting the complexities of international trade in the wake of prolonged disputes.
