Trump's Tariff War Is Crushing American Alcohol Makers
A Canadian boycott and retaliatory trade barriers have wiped out U.S. wine and spirits sales abroad, costing American producers jobs, revenue, and entire export markets.
In recent weeks, new data has emerged from Canada showing the near-catastrophic consequences to American alcohol manufacturers from President Donald Trump's tariff wars. Yet despite clear signs that his tariff policies are backfiring, the president keeps doubling down.
Last year, in response to the administration's tariffs on goods from Canada, provincial liquor stores in Quebec and Ontario enacted a boycott on American wine and distilled spirits. Because the government operates the liquor stores in those provinces, it was relatively straightforward to simply pull all American-based alcohol from store shelves, essentially zeroing out Canadian alcohol sales for American producers.
Now, the data is starting to roll in concerning the impact of the boycott. Since 2024, there has been a jaw-dropping 91 percent decline in U.S. wine sales to Canada. In just October of last year, there was an 84 percent year-over-year drop in wine sales compared to the prior year and a 56 percent drop in distilled spirit sales. Prior to the boycott, Canada was one of the primary export markets for American wine.
As reported by The Independent, large distilling companies like Brown-Forman Corporation (producer of Jack Daniel's) have seen their organic net sales to Canada plummet by 60 percent in the first half of the 2026 fiscal year. Jim Beam faced such a significant drop in sales from both the Canadian boycott and the general drying up of its international markets on account of the tariff wars that it suspended production entirely at its flagship plant.
According to The Independent, smaller distillers in states like Minnesota have suffered 70 percent declines in sales and have been forced to ship production to Canada by working with Canadian contract distillers. The result, in turn, is fewer U.S.-based manufacturing jobs and more Canadian-based jobs.
The pain extends throughout the broader drinks industry. A recent HuffPost report details a broad increase in prices at American cocktail bars nationwide due to current tariffs on products from the European Union and Mexico. Not only are drink prices rising, but many imported products are becoming harder to find as foreign makers of specialty liqueurs, spirits, and wine are increasingly limiting their exports to the U.S.
An under-appreciated aspect of alcohol products is that many are beholden to so-called Standards of Identity rules. These rules dictate that products like Champagne can only come from France, tequila from Mexico, and scotch from Scotland. Given that there are no domestic substitutes for these products, bar owners must either raise prices or remove them from their menus entirely.
Despite the crippling pain being borne by the industry, Trump has shown few signs of reconsidering. In response to news that French President Emmanuel Macron would not join Trump's newly minted "Board of Peace" to resolve the ongoing Gaza conflict, Trump told reporters: "I'll put a 200 percent tariff on his wines and Champagnes, and he'll join, but he doesn't have to join."
In the meantime, the drinks industry—and consumers—will continue to suffer.