American distillers have gotten a expensive chilly shoulder from Canada, the place their exports plunged 85% earlier this 12 months — topping broad declines in key worldwide markets amid global trade tensions, a spirits trade group stated Monday.
Even a thaw in commerce relations might not shake this hangover straight away.
“Although issues have eased up, we nonetheless usually are not again on the shelf in Canada,” stated Kentucky craft distiller Tom Bard. “Most likely gained’t be for a great lengthy whereas.”
The vast majority of Canadian provinces proceed to ban American spirits from cabinets, although Canada eliminated its retaliatory tariff on the merchandise weeks in the past, the Distilled Spirits Council of america stated. There’s one other nagging concern — that client reaction to the trade conflicts might curb the worldwide thirst for American spirits in key markets.
General exports of American spirits fell 9% within the second quarter of 2025 in comparison with a 12 months in the past, the council stated in its new report. Sharp declines occurred in different essential markets — the European Union, United Kingdom and Japan, it stated. That comes on the heels of a banner 12 months for U.S. spirits exports in 2024, the council stated. Complete first-quarter exports in 2025 edged up by 1% from a 12 months in the past.
Within the ultracompetitive spirits world, the sudden drop-off is a dispiriting improvement for U.S. distillers.
“There’s a rising concern that our worldwide customers are more and more choosing domestically produced spirits or imports from international locations apart from the U.S., signaling a shift away from our nice American spirits manufacturers,” Chris Swonger, the council’s CEO, stated Monday in a launch.
Canada stays the one key buying and selling accomplice that retaliated towards U.S. spirits within the newest rounds of commerce conflicts spurred by President Donald Trump’s tariff insurance policies. The president maintains that open commerce value the U.S. hundreds of thousands of manufacturing facility jobs and that tariffs are the trail to American-made prosperity.
However American distilled spirits have been a high-profile goal for retaliation.
Trump’s first-term tariffs on European metal and aluminum spurred the EU to retaliate with a tariff that precipitated American whiskey exports to the EU to plunge, costing distillers greater than $100 million in income from 2018 to 2021, the council has stated. As soon as the tariff was suspended, EU gross sales rebounded for American distillers — till the newest tensions resurfaced within the first 12 months of Trump’s second time period.
The Distilled Spirits Council is urgent for free-flowing commerce for distilled spirits with zero-for-zero tariffs with key markets, saying it might give American distillers the understanding they want.
World markets are more and more very important for producers of American whiskey — which incorporates bourbon, Tennessee whiskey and rye whiskey. The sector faces a supply-and-demand crunch within the U.S., the place a sales slowdown is coinciding with large stockpiles of whiskey, the council stated.
“With the slowdown within the U.S. market, it’s extra necessary than ever for American distillers to have dependable entry to worldwide markets,” Swonger stated. “Till these commerce points are absolutely resolved, many distillers are remaining on the sidelines, fearful that and not using a everlasting return to zero-for-zero tariffs, they might as soon as once more face retaliatory tariffs. They merely don’t need to threat jeopardizing the investments they’d must make to reestablish their presence overseas.”
Probably the most dramatic quarterly drop off in exports occurred in Canada, the place U.S. spirits exports fell beneath $10 million amid the 85% plunge within the April-through-June quarter, the report confirmed.
Elsewhere, exports of American spirits to the European Union — the U.S. trade’s largest export market — fell 12% within the second quarter, the council stated. Exports to the UK dropped 29% and exports to Japan decreased 23%, it stated.
The ache was felt throughout a variety of spirits classes, with quarterly declines of 13% for American whiskey, 14% for vodka, 15% for cordials and 12% for brandy, it stated.
The declines have been softened considerably by surging gross sales to different international locations — together with Mexico, Australia, Brazil, Singapore and South Korea, the council stated.
Distilled spirits have been exported from 43 states final 12 months, with Tennessee and Kentucky rating first and second, respectively, the report stated. Texas was third, adopted by Florida and Indiana.
Massive and small producers alike are feeling the pinch from commerce conflicts.
In August, Brown-Forman Corp. reported a 3% drop in first-quarter web gross sales, however firm CEO Lawson Whiting stated it’s positioned for “resilient ends in the face of persistent headwinds.” It posted double-digit web gross sales drops in Germany and the UK and a virtually 60% decline in Canada. Brown-Forman produces such manufacturers as Jack Daniel’s Tennessee Whiskey and Woodford Reserve bourbon.
However massive distillers possess the capital and market attain to journey out disruptions brought on by commerce disputes — built-in luxuries that the majority small producers don’t have.
For Bard, the commerce tensions abruptly halted his momentum in securing and increasing his foothold in Canada. He and his spouse, Kim, personal The Bard Distillery in western Kentucky. Their manufacturers embrace Muhlenberg and Cinder & Smoke bourbons.
Initially of 2025, their merchandise have been bought in British Columbia and Alberta, they usually have been in talks to develop to different Canadian provinces. The plan was to ship greater than 1,000 instances — largely bourbon together with flavored whiskeys and cream liqueurs — north of the border this 12 months, maybe turning their Canadian enterprise into 15% to twenty% of general gross sales in 2025.
It was an bold plan for a small distiller, however it evaporated amid the commerce battle and Canadian backlash to Trump’s repeated feedback that their nation needs to be the 51st U.S. state.
The Bards haven’t been in a position to offset these losses within the U.S. They’re within the early phases of attempting to interrupt into different international locations, he stated, however that takes time. Within the meantime, they’ve left two manufacturing jobs unfilled, largely due to misplaced income from Canada, he stated.
Reclaiming misplaced market share isn’t simple and he’ll should “begin from sq. one,” Tom Bard stated.
“I might say will probably be subsequent 12 months and we should bodily go up there and spend loads of time attempting to get again on the shelf,” he stated.
