Andrew Muhammad, University of Tennessee
Almost a year and a half after President Donald Trump began slapping tariffs on nearly all U.S. trading partners, Canada’s pushback has reordered the economic relationship between Ottawa and Washington.
Canadians are pulling back on U.S. travel, boycotting U.S. goods and protesting in droves – further galvanized by Trump’s call for Canada to become the 51st U.S. state.
But the example of one sector in particular, U.S. alcohol, shows how quickly access to an important market can disappear – and how difficult it can be to regain.
From 2022 through 2024, Canada accounted for roughly 35% of U.S. wine exports, more than 15% of U.S. beer exports and as much as 13% of U.S. distilled spirits exports. Within just one year of Trump returning to office, Canada’s imports of U.S. alcohol cumulatively have plunged over 70%, thanks to a mix of both tariff and nontariff retaliatory measures.
It’s a sharp reversal from Canada’s traditional role as a top foreign destination for American beer, wine and spirits. That relationship reflected both long‑standing consumer preferences as well as geographic proximity and largely tariff‑free access through agreements like the North American Free Trade Agreement and its successor, the United States-Mexico-Canada Agreement.
As an agricultural economist working on trade issues related to alcohol, I see Canada’s alcohol sector as a textbook example of how market access for politically exposed goods can quickly unravel. And for American beer, wine and spirits producers – and for the farmers who grow the barley, grapes and corn that go into these products – the recent experience highlights how trade disputes often hit food products hardest. If a trade ban becomes entrenched, it opens a way for consumers to develop a taste for domestic as well as other foreign alternatives.
The Trump tariff shock
Before Trump’s tariffs and talk of Canada as the 51st U.S. state, U.S. alcohol occupied substantial shelf space in major alcohol-consuming provinces such as Ontario, British Columbia and Québec. In 2024, these exports to Canada constituted more than 20% of Canada’s alcohol imports, totaling US$744 million. For most U.S. producers, Canada served not only as a key export destination but as a stable and relatively low‑risk entry point into international markets.
That changed in February 2025, when Trump, citing a national security emergency, imposed 25% tariffs on Canada and Mexico. Those tariffs – which were overturned by the Supreme Court in February 2026 – marked the first time that law was used to authorize broad tariffs.
Canada responded by slapping retaliatory tariffs of 25% on roughly $30 billion of U.S. goods and signaling it would significantly expand countermeasures if tensions persisted. It also enacted nontariff countermeasures, most notably by letting provincial liquor authorities remove U.S. beer, wine and spirits from store shelves. These tools, which fall within Canada’s system of shared federal and provincial powers, sharply restricted market access for American producers.
Immediately after Trump’s announcement, eight of Canada’s 10 provinces imposed partial or full bans on U.S. alcohol imports by instructing their liquor boards to stop importing and selling U.S. alcohol altogether. In many cases, American products were physically removed from store shelves and online platforms – sometimes with instructions to target imports from U.S. “red” states that had supported Trump.
U.S. wine exports were hit hardest, plunging from $460 million to just $103 million, while distilled spirits fell from $238 million to $89 million and beer exports from $47 million to $17 million. Collectively, these declines slashed total U.S. alcohol exports to Canada from $744 million to $208 million, wiping out $536 million in trade.
The spat quickly became testy. The alcohol boycott is one of the reasons Trump and White House officials have called Canada “mean and nasty to deal with,” in the words of U.S. Ambassador to Canada Pete Hoekstra.
The trade war’s latest turn
Those provincial restrictions remained in place even after the two countries reached a partial deal exempting about half of USMCA‑compliant goods from ongoing tariffs in summer 2025, leading Canada to scale back some retaliatory levies. However, the de facto trade bans on U.S. alcohol remain in place.
Alcohol resurfaced again recently as a flash point, when the top U.S. trade official, Jamieson Greer, said in April 2026 that existing U.S. levies on Canadian industrial goods would stay in place and might even be toughened until Canada walked back its alcohol restrictions. That threat drew a sharp retort from Canadian Prime Minister Mark Carney.
Meanwhile, the trade dispute hasn’t prompted Canadians to drink less alcohol overall. Instead, their consumption has largely shifted to other countries, especially for wine. United Nations trade data shows that in 2024, American wine accounted for 21% of all imported wine in Canada before dropping to only 5% in 2025. That year, imports from major wine exporting countries not only increased but roughly offset the decline in imports from the U.S. For distilled spirits, the U.S. slipped from 24% in 2024 to only 10% in 2025, while beer has dropped from 13% to 5%. At the same time, Canadian imports of beer, wine, and spirits from other countries increased by 9%, 15%, and 7%, respectively.
“What’s different this time is that people aren’t just swapping one bottle, they’re rethinking the whole bar,” said Craig Peters, CEO of Canada’s Barnburner Whiskey, in an interview with the online magazine VinePair. “Traditionally, those rail spots were locked up by big U.S. brands for decades. Now, we’re seeing bars, especially independents, completely reset and go Canadian across the board.”
Andrew Muhammad, Professor of Agricultural and Resource Economics, University of Tennessee
This article is republished from The Conversation under a Creative Commons license. Read the original article.
