According to data from the Distilled Spirits Council of the United States (DISCUS), Canada was once the second-largest market for American spirits, bringing in about $250 million annually. However, in 2025, Canada dropped to sixth place, with export value falling to $89 million.
From March to December 2025, US liquor exports to Canada decreased from $203 million in 2024 to $60 million, representing a decline of approximately $143 million.
Causes of the tariff dispute
Trade tensions erupted after Canada reacted to US tariff policies. Many provinces removed US whiskey from retail stores, causing sales to plummet.
DISCUS President Chris Swonger said the US spirits industry performs best in a zero-tariff trade environment.
He said:
“Our industry relies on a tariff-free trade environment. Losing more than 70% of the Canadian market is a significant loss.”
Kentucky heavily affected
The impact is particularly pronounced in Kentucky, the center of US bourbon production, as the region was drawn into the cross-border trade dispute. The state produces about 95% of the world's bourbon, creating jobs for over 23,000 workers and contributing about $9 billion annually to the local economy.
Distillers noted that new barriers not only affect exports but also directly impact the production chain, from raw materials to the wooden barrels used for aging spirits.
Although some tariffs have been eased, many Canadian provinces have yet to return American liquor to their shelves, causing the market to continue its decline for US whiskey producers.
