Canadian demand for U.S. alcohol plunges 85% amid trade war, report shows
Exports of American-made alcohol have taken a sharp hit due to ongoing trade tensions, according to a new report from the Distilled Spirits Council. The group says shipments of U.S. spirits to Canada dropped an incredible 85 per cent in the second quarter compared to last year — a much bigger decline than in any other major market.
By comparison, U.S. alcohol exports to the United Kingdom and Japan fell by 23 per cent, while exports to the European Union were down 12 per cent.
“This trend poses a major challenge for the U.S. spirits industry,” the report says. “Many international consumers are switching to domestic or non-U.S. brands, partly because of negative feelings about U.S. tariffs.”
The drop follows Canada’s decision in March to pull American-made alcohol from government-run liquor stores. The move was in retaliation for tariffs imposed by U.S. President Donald Trump. Provinces also stopped ordering new U.S. products.
While Alberta and Saskatchewan later ended their bans, other provinces said they’re still holding back — either selling off remaining stock or refusing to reorder until the trade conflict is settled.
In April, sales of Canadian and other imported spirits in Canada rose 3.6 per cent, while sales of U.S. products fell 68 per cent.
Prime Minister Mark Carney met with President Trump in Washington on Tuesday to discuss tariffs and other trade issues. When asked about Canadians avoiding U.S. products or travel, Trump said he “understands” and expects the situation to “get worked out.”
A recent Ipsos poll found strong support for the “Buy Canadian” movement. More than half of Canadians said they’ve gone out of their way to buy Canadian-made goods or avoid American products — and 82 per cent said they plan to keep doing so even after the trade war ends.
The Distilled Spirits Council warns that American distillers could face “serious financial strain” if the dispute continues. With slowing U.S. demand, exports are key to keeping the industry strong — especially for whiskey makers.
Canada, Japan, the U.K. and the E.U. made up about 70 per cent of all U.S. spirit exports last year, worth over US$2.4 billion.
Both the Distilled Spirits Council and Spirits Canada are calling for U.S. alcohol to return to Canadian store shelves. They argue the ban is hurting both American distillers and Canadian retailers.
“The decision to pull American spirits is not only damaging to U.S. producers, but it’s also cutting revenue for provinces and limiting choice for Canadian consumers,” said Distilled Spirits Council president Chris Swonger.
Spirits Canada added that total spirit sales in Canada fell 12 per cent between March and April — including a six per cent drop in sales of Canadian-made products.
