10
Loading video...
By Lars Hanson
Associate News Editor
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
President Donald Trump can stop a bottle of Canadian whisky at the border. He cannot make an American drinker reach for bourbon instead.
That is the lesson of the first weeks of his ban on Canadian liquor. In September, as a 50 percent tariff and then an outright import ban closed in, Canadian whisky lost more than 15,000 cases of sales from a year earlier in the 18 states where government agencies control liquor sales. American whiskey gained none of them. Its volume slipped 0.1 percent, though dollar sales edged up 0.8 percent, according to the National Alcohol Beverage Control Association, in a month when overall spirits volume rose 3.2 percent.
The growth went elsewhere: to canned cocktails, up nearly 29 percent, and to tequila, up 9.5 percent.
Read More on News
"There's no benefit to American producers with the import ban," Chris Swonger, president and CEO of the Distilled Spirits Council of the United States (DISCUS), the industry's chief trade group, told Newsweek. "And let me be clear on that."
The verdict comes from the industry that the ban was meant to protect, and it cuts to what is at stake. Twenty months of liquor retaliation between the United States and Canada have cost distillers in both countries, cost provinces revenue and narrowed what people on both sides of the border can pour. A government can clear a shelf by decree. It cannot reassign a drinker.
...
Canada Tried This First
The best evidence that shelf bans don't work may come from Canada.
In March 2025, most Canadian provinces pulled American wine and spirits from their government liquor stores in retaliation for Trump's tariffs. Jack Daniel's and Kentucky bourbon vanished from shelves across most of the country. In theory, Canadian distillers stood to gain.
"We did not see a lift in Canadian spirits in Canada," Swonger said. "We saw a decline in Canadian spirit sales, the provinces lost revenue."
Industry figures released at the time showed sales of Canadian-made spirits down 6.3 percent in the boycott's first weeks, even with the American competition gone.
American distillers paid dearly. Their whiskey exports to Canada fell 57 percent in 2025, to $33 million, DISCUS reported. Swonger put the industry's overall loss of Canadian exports at 73 percent.
Now Washington has run the same experiment in reverse, and so far it is producing the same result.
Related Story
Canadian Minister Under Fire Over Kentucky $14,000 Bourbon ‘Booze Cruise’
A Ban With a Bottle-Sized Loophole
The U.S. ban took effect at 12:01 a.m. September 29 under Section 338 of the Tariff Act of 1930, a Depression-era provision that had never been used before Trump reached for it over the summer. The White House said Canada had "maintained and in fact increased its discrimination" against American alcohol.
Trump framed the fight as a test of who needs whom: "WE DON'T NEED CANADA, THEY NEED US!" he wrote on social media in August.
But the order bans packaging, not brands. Whisky shipped in containers larger than four liters is exempt, and Crown Royal, the best-selling Canadian whisky in America, already arrives in bulk and is bottled in the United States. Swonger called that carve-out "a good thing because American jobs are here to help bottle that product." The two countries' distillers, he said, are "very intertwined."
So the biggest Canadian brand keeps flowing. The producers with no workaround are small distilleries that bottle at home, in an industry that sent about 93 percent of its spirits exports to the United States last year.
The Drinkers Went Elsewhere
Canadian whisky is clearly hurting. In July, NABCA reported, it declined in every control state. In August, the month when the 50 percent tariff took effect, its volume fell 12.7 percent. Over the past year, it has fallen further than any other major spirit.
But bourbon was not waiting to catch it. American whiskey's domestic sales fell 1.8 percent in 2024. Sales fell another 0.9 percent in 2025, according to DISCUS. In the control states, its volume is down 3 percent over the past year. Nationally, wholesaler data released October 27 showed U.S. whiskey still declining through September.
The reason, Swonger said, is that whiskey is not a commodity.
"We're an industry of distinctive products," he said. "American consumers love Canadian whiskey, just like they love Scotch and Irish whiskey."
Canadian whisky must be made in Canada, just as bourbon must be made in the United States. A drinker who loses one does not automatically reach for the other. Increasingly, that drinker reaches for a can.
Swonger said distillers have been navigating "an unpredictable marketplace really since June 2018," when the European Union first answered U.S. steel tariffs by taxing American whiskey. Spirits, he said, have become "a leverage point because of the iconic nature of our brands" in disputes "that have nothing to do with our industry."
One caution: The September figures include only two days of the ban itself. NABCA's October report, expected in early December, will be the first full month under it.
The Shelves Belong to the Premiers
The ban's deeper flaw is that it pulls the wrong lever.
Ottawa does not tariff American liquor. Its current counter-tariff list includes no beer, wine or spirits. The barrier is the provinces, which run their own liquor systems and decide what to stock. Eight of 10 still aren't buying American alcohol.
Saskatchewan, one of the two still selling it, imposed a 50 percent levy on September 8, which the White House cited in its ban. British Columbia Premier David Eby said in July that there was "not a chance in hell" that U.S. alcohol would return to his province's shelves.
The ban presses Ottawa. The shelves belong to the premiers.
A Week From the Holidays
There are signs of a thaw. On November 1, Prime Minister Mark Carney said he'd had a constructive conversation with Trump and that negotiators would work toward a deal in the coming weeks. Trump spoke of the "concept" of an agreement.
Swonger said he is "very, very hopeful that American spirits can get back on the shelves in the provinces. And in return, the import ban can be lifted, as well." What distillers want, he said, is a return to "a predictable, zero for zero, trade-barrier-free environment."
Time is short. The holiday selling season, Swonger said, is "the most important time of the year for the Canadian and U.S. spirits industry."
Until a deal arrives, the bottles on both sides of the border remain bargaining chips. And the people who make them, sell them and drink them are, in Swonger's words, "unfortunate victims in this broader trade dispute."
Contact Newsweek editors on this story: Gabe Whisnant and Dave Siminoff.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines