Alcohol became a flashpoint in the US-Canada trade war. Now both sides say they're losing.
Alcohol makers in the US and Canada say the industry has been used as leverage in the trade war and both sides are suffering.
The US-Canada trade war intensified on Saturday with the imposition of 50% tariffs on Canadian alcohol. American alcohol had been banned in Canada since last year, and remains restricted in most of the country. Both alcohol industries - American and Canadian - claim they are suffering as a result of the dispute. The alcohol battle began a year and a half ago when President Trump imposed 25% tariffs on Canadian goods, which Canada retaliated against with its own 25% tariffs, including on alcohol.
The bans were so effective that Trump cited them as a key factor in his latest tariffs, including the new 50% tariff on Canadian alcohol. While finger-pointing over who started the conflict continues, both sides acknowledge they are losing out. Alcohol represents a small portion of the overall trade between the two nations, but the impact has been significant and visible, particularly due to the outright bans.
Unlike other goods, alcohol is closely tied to its country of origin and American consumers often prefer Canadian whisky, for example. The US and Canadian alcohol industries are now calling for an end to the tariffs and bans. Canadian provinces control alcohol imports and imposed bans on American alcohol around March 2025, the same month Canada introduced its retaliatory tariffs.
While those tariffs were lifted in September 2025, most of the province-level bans remain in place. Eight out of ten provinces still have some restrictions, with Alberta and Saskatchewan being the exceptions. The bans have had a devastating impact on the US alcohol industry, pushing imports from Canada down by 81% from March 2025 to February 2026, compared to the previous year.
Overall US exports to Canada fell by 4.8% in 2025. Canadian alcohol makers, who rely more heavily on the US market than American makers do on Canada, face new 50% tariffs imposed by Trump, which he said were a response to Canadian discrimination against American-made alcohol. Both industries are seeking an end to the alcohol bans and tariffs, but progress has been slow.
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