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EXCLUSIVE: LOUISVILLE, Ky. — A year after Canadian provinces yanked American whiskey from store shelves in a trade clash triggered by President Donald Trump’s tariffs, U.S. spirits exports have collapsed by nearly 70%, gutting what had been one of the industry’s most important overseas markets.
In 2025, Canada slid from the second-largest destination for American spirits to sixth, as exports declined two-thirds to $89 million, according to data compiled by the Distilled Spirits Council of the United States (DISCUS).
Before the dispute, the market had generated roughly $250 million annually for American distillers.
The drop was immediate and relentless. From March through December, exports fell from $203 million in 2024 to just $60 million in 2025 — a roughly $143 million wipeout.
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Despite the lifting of some tariffs, most Canadian provinces continue to shut American alcohol out of retail stores.
“Our industry thrives in a zero-for-zero tariff environment,” Chris Swonger, DISCUS president and CEO, told Fox News Digital.
The export downturn comes as Trump continues to use tariffs as economic leverage — a strategy his administration argues is designed to strengthen U.S. 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.
“Since Liberation Day, it’s unfortunate to report that our industry has lost over 70% of our exports to Canada because many provinces have decided not to carry American spirits,” Swonger said.
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Nowhere is the fallout felt more acutely than in Kentucky, the epicenter of America’s bourbon business.
The Bluegrass State is bourbon’s beating heart, producing 95% of the world’s supply, employing more than 23,000 workers and generating a cool $9 billion annually, according to figures provided by the Kentucky Distillers’ Association.
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For distillers on the ground, the trade dispute doesn’t end at the border.
Owen Martin, master distiller at Angel’s Envy, said the consequences reach into the bourbon-making process itself.
“There are the tariffs on finished goods and on us shipping abroad, but I’m even thinking a step below that,” Martin said.
He pointed to barrels as one example. By law, bourbon must be aged in new American oak barrels, which can only be used once for bourbon production. But port casks — used to finish Angel’s Envy bourbon — can be reused multiple times.
“Those are the sorts of things, as a maker, that I have to be aware of in any given year,” Martin said. “You have different opportunities and different challenges.”
Beyond supply chain pressures, the export downturn is largely tied to provincial retail bans in Canada. The majority of provinces have yet to restore American alcohol to government-run retail stores.
Swonger said the dispute has produced a striking irony between two whiskey-loving nations.
“American consumers love Canadian whisky, and Canadians love Kentucky bourbon,” he said. “We’re hoping this gets resolved.”
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