U.S. Whiskey Exports to Canada Plummet 70% After Trump Tariffs Spark Trade War

Canada was once the second-largest international market for American whiskey, but it has now become one of the industry’s most devastating losses. U.S. spirits exports to Canada have dropped by nearly 70%, collapsing from a $250 million annual market to just $89 million, according to data from the Distilled Spirits Council of the United States (DISCUS).

The sharp decline followed a trade dispute triggered by President Donald Trump’s tariffs, which led several Canadian provinces to remove American alcohol from store shelves. Owners of iconic brands like Jack Daniel’s and Jim Beam have responded with layoffs and paused production. Even after some tariffs were lifted, many provincial liquor systems have continued to exclude U.S. spirits, dealing a severe blow to one of the industry’s most critical foreign markets, Fox News reported.

Canada Drops from Second to Sixth in U.S. Whiskey Exports

Canada, which was once the second-largest destination for American spirits exports, has now fallen to sixth place, Fox News reported. The collapse occurred rapidly: from March through December, U.S. spirits exports to Canada fell from $203 million in 2024 to just $60 million in 2025—a loss of roughly $143 million.

Trump’s Tariffs and Canada’s Retaliation

President Trump has frequently used tariffs as economic leverage, arguing that such measures strengthen American manufacturing and address trade imbalances. However, the spirits industry contends that Canada’s retaliatory actions have destroyed one of its most profitable export markets.

“Our industry thrives in a zero-for-zero tariff environment.”

Chris Swonger, president and CEO of DISCUS, acknowledged the administration’s efforts to address trade imbalances but emphasized the damage caused by provincial bans. “Since Liberation Day, it’s unfortunate to report that our industry has lost over 70 percent of our exports to Canada because many provinces have decided not to carry American spirits,” he said.

Kentucky’s Bourbon Industry Faces Severe Impact

Few places have felt the consequences more acutely than Kentucky, the heart of America’s bourbon industry. The state produces 95% of the world’s bourbon supply, supports over 23,000 jobs, and generates approximately $9 billion annually, according to the Kentucky Distillers’ Association. The export collapse comes at a time when the bourbon industry is already under significant financial strain, with several distillers scaling back production, facing slowing demand, or dealing with mounting debt over the past year.

Major Brands Struggle as Demand Weakens

Major producers are already feeling the pressure. Suntory, the Japanese beverage giant that owns Jim Beam, Maker’s Mark, and the House of Suntory portfolio, reported weaker whiskey sales last year. Brown-Forman, the parent company behind Jack Daniel’s Tennessee Whiskey, has also warned of declining sales and profits as global demand softens.

Smaller Brands Bear the Brunt of the Crisis

Smaller and midsize players are under even greater stress. Premium whiskey brand Uncle Nearest is insolvent and owes millions of dollars to vendors, including WhistlePig and American Spirits, according to creditors. Meanwhile, MGP Ingredients, one of the largest contract distillers in the U.S. and a key supplier for many brands, is also facing financial challenges.