US Spirits Exports Hit Hard by Trade Wars: Canada Leads Dramatic Decline – Breaking News
WASHINGTON D.C. – American whiskey, vodka, and other spirits are facing a significant slump in international sales, with exports plummeting in key markets like Canada, the European Union, and Japan. The downturn, revealed in a new report from the US Distilled Spirits Council, underscores the lasting economic impact of ongoing trade tensions and raises concerns about the future of the American spirits industry. This is a developing story, and archyde.com is providing up-to-the-minute coverage.
Canada’s 85% Drop: A Stark Warning
The most dramatic decline is occurring in Canada, where US spirits exports have fallen by a staggering 85% in the second quarter of 2025, dropping below $10 million. This comes despite Canada lifting its retaliatory tariffs on US spirits weeks ago. Tom Bard, owner of The Bard Distillery in Kentucky, paints a bleak picture: “We are not back on the shelves in Canada, and we probably won’t be for a good time.” Bard’s experience highlights a critical issue – even the removal of tariffs doesn’t guarantee a swift return to normalcy when consumer sentiment has been soured by prolonged trade disputes. This situation is particularly painful for smaller, artisanal distillers like The Bard Distillery, who had ambitious expansion plans now put on hold.
Ripple Effect Across Key Markets
The pain isn’t limited to Canada. Exports to the European Union, the largest export market for US spirits, decreased by 12% in the same period. The United Kingdom saw a 29% drop, and Japan experienced a 23% decline. Overall, US spirits exports fell 9% in the second quarter of 2025, reversing the positive momentum of a record-breaking 2024. The categories most affected include American whiskey (down 13%), vodka (down 14%), and brandy (down 12%).
A History of Retaliation: Trump-Era Tariffs Take Their Toll
This isn’t the first time US spirits have been caught in the crossfire of trade wars. Former President Trump’s tariffs on steel and aluminum sparked retaliatory tariffs from the EU, causing US whiskey exports to the EU to collapse between 2018 and 2021, costing distillers over $100 million. While sales rebounded after the tariffs were suspended, the current tensions are reigniting those fears. Canada remains the only key trade partner still actively retaliating against US spirits, a direct consequence of the Trump administration’s trade policies. The core argument from the Trump administration – that open trade costs American jobs – continues to fuel these disputes.
Beyond Tariffs: Shifting Consumer Preferences
The Distilled Spirits Council warns of a more fundamental shift in consumer behavior. “There is a growing concern that our international consumers are increasingly opting for locally produced spirits or imports from countries other than the United States,” says CEO Chris Swonger. This suggests that the damage extends beyond simple tariff barriers; consumers may be actively avoiding US brands as a result of the political climate. This is a critical challenge for the industry, as global markets are becoming increasingly vital, especially given a slowdown in domestic sales and a growing surplus of whiskey stock.
What’s Next for US Distillers?
The industry is now pushing for tariff-free trade agreements with key markets to provide much-needed certainty. However, with a potential return to Trump-era policies looming, distillers are hesitant to invest heavily in re-establishing their international presence, fearing further retaliatory measures. Brown-Forman, the maker of Jack Daniel’s, reported a 3% net sales drop in the first quarter, with significant declines in Germany, the UK, and Canada, but maintains a cautiously optimistic outlook. For smaller distillers like The Bard Distillery, the situation is more dire, forcing them to freeze hiring and reassess their growth strategies. Tom Bard estimates it will take at least a year, and significant investment in on-the-ground marketing, to rebuild their Canadian business from scratch.
The current situation underscores the vulnerability of the US spirits industry to geopolitical forces. As trade tensions continue to simmer, American distillers face a challenging road ahead, requiring both strategic adaptation and a concerted effort to secure favorable trade agreements. Stay tuned to archyde.com for continuing coverage of this developing story and its impact on the American economy.
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