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What We Know About New Tariffs on American Alcohol

After President Donald Trump enacted 25 percent tariffs on goods from Canada and Mexico on February 1, the U.S. alcohol industry was slammed with retaliatory tariffs. Here’s the latest in this new trade war

American alcohol is, once again, caught in the crosshairs of a trade war. Photo by Daniel Vogel/Unsplash.
American alcohol is, once again, caught in the crosshairs of a trade war. Photo by Daniel Vogel/Unsplash.
This story was updated on February 4, 2025.

On February 1, President Donald Trump formally enacted 25 percent tariffs on all goods from Canada and Mexico—plus 10 percent tariffs on goods from China—instigating several days of frantic negotiating and countermeasures, in which the American alcohol industry was amongst the prime targets. Trump’s action was taken in response to the “extraordinary threat posed by illegal aliens and drugs,” which, according to a fact sheet released by the White House, constitutes a national emergency.

The wine and spirits industries were caught in the crosshairs of Trump’s last trade war from 2018 to 2023, which dealt a serious blow across all three tiers. American whiskey producers lost sales in export markets due to EU tariffs, and wine and spirits importers, distributors, and buyers—and therefore, consumers—all saw costs rise thanks to U.S. tariffs on certain imports. The impact of this trade war could be even greater. As of February 3, however, the Trump administration struck a deal with both Canada and Mexico, with a 30-day reprieve, averting a crisis, for now.

Here’s what we know so far about the new tariffs on the American alcohol industry. This is a developing story that will be updated as the situation unfolds. 

U.S. Reaches Deals with Mexico and Canada to Delay Tariffs

Before the tariffs were due to take effect on February 4, Mexican President Claudia Sheinbaum and the Trump administration reached a series of agreements on border security to delay their onset for a month. Sheinbaum agreed to deploy 10,000 troops, who Trump said would be designated to stop the flow of migrants and illegal drugs across the U.S.-Mexico border. Mexico will also receive help from the U.S. government to prevent the trafficking of weapons into the country. 

Later on February 3, Canada and the U.S. reached a deal to delay U.S. tariffs on Canadian goods, following two calls between Canadian Prime Minister Justin Trudeau and Trump. “I just had a good call with President Trump,” Trudeau said in a post on X. “Proposed tariffs will be paused for at least 30 days while we work together.” The two administrations will work to negotiate a border deal over the next month.

Canada’s Prime Minister Previously Announced Retaliatory Tariffs on American Alcohol

On the evening of February 1, Trudeau announced that the country would impose 25 percent tariffs against $155 billion worth of American goods in response to Trump’s tariffs. American alcohol products were the first named as included in these tariffs.

“Like the American tariffs, our response will also be far-reaching and include everyday items such as American beer, wine, and bourbon…” Trudeau said in a televised press conference. Tariffs were due to go into effect on February 4 for $30 billion worth of goods, followed by further tariffs on $125 billion worth of goods in 21 days; both measures are now on hold.

Canadian Provinces Ban American Alcohol from Government Stores

Many Canadian premiers announced their own measures against American alcohol over the weekend. David Eby, the premier of British Columbia, urged residents to boycott U.S. alcohol and banned American alcohol from Republican states in BC Liquor Stores, which are government-run.

“For our first of many steps, effective today, I have directed BC Liquor sales to immediately stop buying American liquor from red states,” he said in a televised address. “Liquor store employees will be removing the most popular of these brands from government store shelves.” British Columbia purchases $3.5 billion worth of liquor each year, he said.

Ontario, as it had previously promised, followed suit. “Starting Tuesday, we’re removing American products from LCBO shelves,” said Ontario premier Doug Ford in a statement posted to X on Sunday morning. “As the only wholesaler of alcohol in the province, LCBO [the Liquor Control Board of Ontario] will also remove American products from its catalogue so other Ontario-based restaurants and retailers can’t order or restock U.S. products.” LCBO sells nearly $1 billion worth of American alcohol annually, Ford added.

The premiers of Nova Scotia, Newfoundland, Labrador, Manitoba, and Prince Edward Island, as well as the government of Quebec, also instructed the removal of American alcohol from shelves. These measures are also now on hold. 

DISCUS Denounces Canada’s Retaliation Against the Spirits Industry

Chris Swonger, the president and CEO of the Distilled Spirits Council of the United States (DISCUS), denounced the retaliatory measures from Canadian provinces in a statement on Sunday. “This aggressive retaliation targeting American spirits is extremely disappointing and counterproductive. Taking American spirits off the store shelves will needlessly reduce revenues for the provinces and hurt Canadian consumers and hospitality businesses,” he said. “We urge the U.S. and Canada to work together to reach an agreement that continues to foster a thriving spirits industry between our two countries.”

According to DISCUS, the U.S. exported $255 million worth of spirits from Canada and imported $537 million worth of Canadian spirits in 2023. Swonger’s statement comes after a joint statement from DISCUS, the Chamber of the Tequila Industry, and Spirits Canada was made on Saturday, before Trudeau’s announcement. 

“We are deeply concerned that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry,” the statement said. “Recently the North American spirits sector is experiencing a slowdown due to the continued impact of COVID and economic factors like inflation. This slowdown will be exacerbated if a cycle of tariffs and matching retaliation begins, and the impact will be felt not just by the distilled spirits industry, but also by consumers and the struggling hospitality sector, which is still recovering from the pandemic.”

Trump Admits That Tariffs Will Come With “Some Pain”

On Sunday, Trump said that tariffs would bring “some pain” to Americans but justified the actions as worthwhile. “Will there be some pain? Yes, maybe (and maybe not!). But we will make America great again, and it will all be worth the price that must be paid,” he wrote on Truth Social.

Dispatch

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Courtney Schiessl Magrini is the editor-in-chief for SevenFifty Daily and the Beverage Media Group publications. She has held sommelier positions at some of New York’s top restaurants, including Marta, Dirty French, and Terroir, and her work has appeared in Wine Enthusiast, GuildSomm, Forbes.com, VinePair, EatingWell Magazine, and more. She holds the WSET Diploma in Wines. Follow her on Instagram at @takeittocourt.

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