American spirits exports to Canada have seen a significant downturn, plummeting by 85% in early 2025. This sharp decline is highlighted in a report by the Distilled Spirits Council of the United States and underscores the broader impacts of ongoing trade tensions affecting U.S. distillers.
Impact of Trade Tensions on Spirits Exports
The decline in U.S. spirits exports isn’t limited to Canada alone. Overall, American spirits exports fell by 9% in the second quarter of 2025 compared to the same period in 2024. This downturn follows a strong performance in 2024 and raises concerns about the long-term effects of international trade conflicts.
Regional Breakdown of Exports
- Canada: Exports dropped to below $10 million.
- European Union: A 12% decline.
- United Kingdom: A decrease of 29%.
- Japan: A 23% drop in exports.
As U.S. distillers struggle with these export declines, there is growing worry that international consumers may shift towards domestically produced spirits or imports from other countries.
The Role of Tariffs
Canada, specifically, has become a focal point of the trade conflict. Although retaliatory tariffs on American spirits were removed recently, many provinces still prohibit U.S. products from their shelves. Chris Swonger, CEO of the Distilled Spirits Council, emphasized the critical need for reliable access to international markets amidst the uncertainty created by tariffs.
Concerns from Craft Distillers
Small distillers, like The Bard Distillery in Kentucky, have felt the economic impact of these disruptions. Owner Tom Bard noted that their plans to expand into Canada have stalled due to trade tensions and consumer perception influenced by political climate. They had aimed to sell over 1,000 cases in Canada, projecting that this market would account for 15% to 20% of their sales in 2025.
Future Prospects and Recovery
Despite the challenges posed by these trade issues, some optimism remains for U.S. distillers. Swonger urged for a “zero-for-zero” tariff policy to foster free trade for distilled spirits. Ensuring this could provide U.S. producers with the stability needed to recover lost market share.
As distillers navigate this complex landscape, re-establishing a presence in markets like Canada will require renewed efforts and time. Bard expressed the need to approach the Canadian market again, emphasizing the importance of personal engagement in overcoming existing barriers.
Overall, the U.S. distilled spirits industry faces a turning point. With ongoing volatility in international trade, the future of American spirits sales depends significantly on resolving these issues and adapting to changing consumer preferences.
