For nearly four decades, since the Canada-U.S. Free Trade Agreement and continuing under the Canada-U.S.-Mexico Agreement, Canadian spirits have moved tariff-free across the shared border, supporting investment, job creation, innovation and economic growth in both countries. On Aug. 19, they will go from a zero per cent tariff to a 50 per cent tariff overnight, threatening to undermine that longstanding partnership.

“Both the Canadian and American spirits industries have felt significant impacts of this broader trade dispute,” said Cal Bricker, president and CEO of Spirits Canada. “While we are disappointed by this announcement, we remain committed to working collaboratively with governments on both sides of the border to reach a practical solution before these tariffs take effect. The long-standing trade relationship between Canada and the U.S. has benefited producers, consumers, workers and governments alike, and we believe that relationship is worth protecting.”

Canada’s spirits sector is uniquely vulnerable to the risks of these tariffs. Nearly 50 per cent of all Canadian spirits production is destined for the U.S., making continued access to that market essential for Canadian distillers, farmers, supply chains and the thousands of Canadians whose livelihoods depend on the industry.

The tariff applies to the principal distilled spirits classifications, and would include spirits-based ready-to-drink beverages.

The announcement follows provincial decisions to remove U.S. beverage alcohol products from retail distribution systems. While intended as a response to broader trade tensions, those measures have now become the stated basis for direct U.S. retaliation against Canadian spirits exports.

In 2025 alone, approximately 93 per cent of Canada’s total spirits exports were destined for the U.S. market, with the remaining seven per cent destined for other markets. Forty-eight per cent of spirits production in Canada is tied to U.S. demand, leaving limited near-term alternatives to replace it. Spirits Canada is calling on federal and provincial governments to work together immediately to prevent these tariffs from taking effect.

Specifically, Spirits Canada urges governments to:

• Engage immediately with U.S. counterparts to secure the withdrawal or suspension of the announced tariffs before Aug. 19
• Restore reciprocal market access for U.S. beverage alcohol products through provincial distribution systems as part of a broader effort to protect Canadian exports, jobs and investment
• Avoid further escalation through additional beverage alcohol countermeasures that could trigger further retaliation against Canadian producers
• Establish a co-ordinated federal-provincial strategy that recognizes the national economic consequences of provincial policy decisions
• Prepare contingency support for Canadian distillers facing cancelled orders, production disruptions, inventory challenges and reduced access to the U.S. market

Spirits Canada remains committed to working collaboratively with governments and industry partners on both sides of the border to identify solutions that prevent these tariffs from taking effect.

“The North American spirits sector is deeply interconnected,” added Bricker. “Tariffs do not simply affect exporters – they impact farmers, manufacturers, hospitality businesses, retailers, governments and ultimately consumers in both countries. We are concerned that this action could trigger a cycle of retaliatory measures that harms an industry that has prospered under decades of fair and reciprocal trade.”

Spirits Canada continues to believe that maintaining fair, reciprocal duty-free access for distilled spirits is essential to supporting jobs, economic growth and investment throughout North America. The Canadian and American spirits industries have demonstrated for decades that open trade benefits producers, consumers and governments alike.

“We urge all parties to return to the negotiating table as quickly as possible. By working collaboratively and constructively, we are confident that a solution can be found that restores certainty, protects Canadian jobs and preserves one of North America’s strongest trading relationships,” said Bricker.