LOUISVILLE, Ky. — A year after Canadian provinces pulled American whiskey from store shelves in a trade fight sparked by President Donald Trump, U.S. spirits exports have collapsed nearly 70%, devastating what was one of the industry’s most important foreign markets.
In 2025, Canada fell from the second-largest destination for American spirits to sixth, with exports falling by two-thirds to $89 million, according to data compiled by the Distilled Spirits Council of the United States (DISCUS).
Before the dispute, the market generated approximately $250 million annually for U.S. distilleries.
The decline was immediate and relentless. From March to December, exports fell from $203 million in 2024 to just $60 million in 2025 – roughly $143 million.
Although some tariffs have been lifted, most Canadian provinces continue to prohibit the sale of American alcoholic beverages in retail stores.
“Our industry thrives in a tariff-free environment,” Chris Swonger, president and CEO of DISCUS, told Fox News Digital.
The decline in exports comes as Trump continues to use tariffs as economic leverage — a strategy his administration says is designed to boost American manufacturing and reduce trade imbalances.
While Swonger said the industry recognizes the Trump administration’s efforts to reduce trade imbalances, he noted that the loss of Canadian shelf space has had a significant impact on exports.
“We are sad to announce that since Emancipation Day, our industry has lost more than 70 per cent of our exports to Canada because many provinces have decided not to transport American spirits,” Swunger said.
Nowhere were the repercussions felt more acutely than in Kentucky, the center of America’s bourbon trade.
The Bluegrass State is the beating heart of bourbon, producing 95% of the world’s supply, employing more than 23,000 workers and generating $9 billion annually, according to figures provided by the Kentucky Distillers’ Association.
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For distilleries on the ground, the trade dispute doesn’t end at the border.
The consequences extend to the bourbon-making process itself, said Owen Martin, master distiller at Angel’s Envy.
“There are tariffs on finished goods and on overseas shipping, but I’m considering even a step lower than that,” Martin said.
He pointed to barrels as an example. By law, bourbon must be aged in new American oak barrels, which can only be used once to produce bourbon. But port barrels—used to finish Angel’s Envy bourbon—can be reused multiple times.
“Those are the things, as a maker, that I have to be aware of in any given year,” Martin said. “You have different opportunities and different challenges.”