President Donald Trump’s ongoing trade dispute with Canada might soon impact consumers directly, particularly as a hefty 50% tariff on Canadian alcoholic beverages is being discussed. This potential tariff poses a significant risk to bars, restaurants, and liquor stores across the United States.
Chris Swonger, the CEO of the Distilled Spirits Council, expressed concerns that these tariffs could adversely affect American hospitality businesses while simultaneously pressuring Canada to restore the availability of U.S. spirits. He pointed out that this situation is precarious for both countries. Swonger stated, “First and foremost, I want to thank President Trump, because he recognizes that our industry has lost 73% of U.S. spirits exports to Canada due to state restrictions on the purchase of U.S. spirits.” He hopes that a resolution can be reached between the Trump administration and Canadian leaders to facilitate the return of American spirits to store shelves.
The looming tariffs represent an escalation in the trade conflict that has already led to a significant drop in U.S. spirits exports to Canada. In retaliation for prior U.S. tariffs, certain Canadian provinces have barred American spirits from their retail outlets.
On Tuesday, President Trump and Canadian Prime Minister Mark Carney engaged in urgent discussions in a last-ditch effort to avert these tariffs before a midnight deadline. If enacted, these tariffs would impact approximately $20 billion worth of Canadian imports, encompassing alcoholic beverages, dairy, automobiles, hockey gear, and more. The new tax would extend to various products, including Canadian whisky, vodka, gin, rum, wine, and beer.
Before the trade tensions escalated, Canada represented a market worth around $250 million annually for U.S. distillers. However, it has since plummeted from being the second-largest export destination for U.S. spirits to sixth place by 2025. The value of U.S. exports to Canada dropped dramatically—from $203 million in 2024 to just $60 million in 2025.
This situation is particularly dire for Kentucky, which is responsible for 95% of the world’s bourbon, supporting over 23,000 jobs in the industry. Swonger believes that imposing high tariffs could become the necessary leverage to motivate Canadian authorities to reopen their markets to U.S. producers. He suggested, “Considering the application of a 50% tariff on Canadian spirits is expected to compel Canadian provincial leaders to take action to place U.S. spirits back on store shelves.”
The implications stretch beyond just distilleries on each side of the border. Canadian whiskey and other Canadian spirits are widely consumed in the U.S., in homes and bars. Hence, new trade barriers might adversely affect the broader hospitality industry.
Swonger highlighted a historical trend where the U.S. exports about $220 million worth of spirits to Canada each year, while Canadian producers send more than $500 million worth to the larger American market. However, he was cautious in stating that the U.S. spirits industry does not want to see tariffs implemented.
He warned that a 50% tariff would severely damage the Canadian spirits industry and have a “real impact on the American hospitality economy.” Swonger emphasized that the spirit industry prefers free trade without tariffs or barriers. “We are an industry that thrives on zero-to-zero tariffs and zero trade barriers,” he said.
As negotiations are set to continue until the deadline, distillers are watching closely, hoping that Trump’s pressure will lead to a favorable agreement. Swonger noted, “I hope I can get back to that shape tomorrow.”
