American spirit exports to Canada experienced an 85% decline in the second quarter of 2025, a situation deemed “very troubling” by the Distilled Spirits Council of the United States. Trade tensions prompted consumers in key international markets to turn away from U.S.-made products, leading to this significant drop in exports.
The council’s recent report highlighted a 29% decrease in exports to the U.K. and a 23% decrease in exports to Japan, but the most substantial decline was observed in Canada. These countries, alongside the European Union, collectively represented 70% of U.S. spirit exports in 2024.
The council, representing producers of spirits like whisky, vodka, rum, and brandy, suggested that the shift in consumer behavior could be due to perceived unfair U.S.-imposed tariffs, prompting consumers to support domestic industries or explore non-U.S. alternatives. Sales to Canada plummeted below $10 million US in the second quarter.
Council CEO Chris Swonger expressed concerns over the immediate negative impact of trade tensions on U.S. spirit exports, urging the President to facilitate a return to tariff-free trade with longstanding partners for the industry’s sustained growth.
The removal of American alcohol products from Canadian shelves has led to a surge in local alcohol sales, with Nova Scotia seeing a notable increase in sales of local spirits and wine. The Nova Scotia Liquor Corporation reported a 24.2% rise in Nova Scotia spirit products sales and a 15.1% increase in wine sales compared to the previous year.
Additionally, Canadian wine and whisky sales saw an 8.9% and 8.5% increase, respectively, compared to the previous year. Despite potential resolution of the trade dispute and the reintroduction of American alcohol into the market, some Canadian consumers may continue to prioritize local products out of a sense of national loyalty.
Experts, like Robert Huish from Dalhousie University, emphasized the impact of the trade dispute on U.S. spirit exports to Canada, noting the significant role Canadian purchasers play in the market. Negotiations between Canadian and American officials are ongoing to address tariff issues.
The overall sentiment suggests a shift in consumer preferences towards local products amidst trade uncertainties, posing challenges for American spirit producers seeking to regain their market share in Canada.
