The U.S.-Canada Trade War: How Tariffs Are Impacting Liquor Sales and Beyond

Empty Shelves and Rising Tensions: The Fallout of U.S. Tariffs on Canada

The recent imposition of tariffs by the Trump administration on goods from Canada and Mexico has sparked an escalating trade war, and the effects are already visible. On Tuesday, as the new tariffs took effect, Canadian consumers were met with empty shelves where American liquor products once sat. Social media flooded with photos and videos of barren store sections, particularly in provinces like Quebec and Nova Scotia, where signs reading “Products of USA” now hung above vacant spaces. Joshua Gariepy, a university student from Quebec, captured the situation vividly with a photo of empty shelves under a sign that read “Etats-Unis” (French for “United States”). “To me, this photo perfectly captures the situation,” he said in an interview. “The ‘Products of USA’ sign remains, but the shelves are empty.”

The New Brunswick government also took to social media to announce it had stopped purchasing American alcohol, sharing a video of an employee removing U.S.-sourced wine from store shelves. Similarly, a TikTok user named “Keltieheather” posted footage of bare shelves under “USA” signs at a Nova Scotia store. These actions align with the Liquor Control Board of Ontario’s decision to cease purchasing all U.S. products, as stated on its website.

The Trump Administration’s Tariffs: A Response to the Fentanyl Crisis?

The tariffs, which impose a 25% levy on nearly all goods from Canada and Mexico, were enacted by the Trump administration under the premise of holding the U.S.’s largest trading partners accountable for the flow of fentanyl into the country. However, Canadian Prime Minister Justin Trudeau quickly pushed back, calling the tariffs unjustified. In a statement on Tuesday, Trudeau noted that less than 1% of the fentanyl intercepted at the U.S. border comes from Canada, undermining the rationale behind the tariffs. Despite this, the U.S. moved forward with the measures, prompting Canada to retaliate.

In response to the U.S. tariffs, Canada imposed its own 25% tariffs on $155 billion worth of American goods, targetingproducts ranging from agricultural items to alcohol. This tit-for-tat approach has intensified fears of a broader trade war, with potentially far-reaching consequences for both economies.

The Economic Ripple Effects: Price Hikes and Job Losses

The escalating trade tensions are already beginning to ripple through the U.S. economy. Major retailers have warned consumers to expect price increases due to the new import taxes. The tariffs are also likely to drive up the cost of alcohol imports from Mexico and Canada, while simultaneously harming the sale of U.S.-produced spirits in those countries. For example, in 2023, Kentucky exported $76 million worth of whiskey and other spirits to Canada, according to Canada’s Department of Agriculture and Agri-Food. This week, however, Kentucky bourbon was among the U.S. products pulled from Canadian store shelves.

Ontario Premier Doug Ford highlighted the direct impact on Kentucky bourbon during a press conference, saying, “The governor of Kentucky said, ‘Don’t touch our bourbon,’ and I said, ‘Governor, that’s the first thing we’re going after.’” He added, “We’re the largest purchaser of bourbon in the world for Kentucky bourbon manufacturers. They’re done. They’re gone.” The removal of U.S. spirits from Canadian stores has also raised alarms among industry groups. The Distilled Spirits Council expressed its concern, stating that the tariffs could lead to the loss of 31,000 U.S. jobs across the wine and spirits supply chain, affecting everyone from distilleries to bars and retailers.

The Trade War’s Impact on Jobs and Industries

The Distilled Spirits Council warned that the 25% tariff on distilled spirits imports from Canada and Mexico would “result in great harm to U.S. companies and employees throughout the wine and spirits supply chain.” The council emphasized that the tariffs would affect not just alcohol producers but also shippers, importers, and exporters of wine and spirits. Restaurants, bars, and retail outlets are also expected to feel the pinch as prices rise and product availability dwindles.

In a statement, the council wrote, “These U.S. tariffs on Mexico and Canada will result in great harm to U.S. companies and employees throughout the wine and spirits supply chain, from restaurants, bars, and retail outlets, to shippers and importers/exporters of spirits and wine products.” This stark warning underscores the far-reaching consequences of the tariffs, which extend beyond mere economic numbers to the livelihoods of thousands of people on both sides of the border.

A Brewing Crisis: The Human Cost of Trade Wars

As the trade war between the U.S. and Canada escalates, the human cost of these tariffs is becoming increasingly clear. For consumers, the immediate impact is evident in the empty shelves and rising prices. For workers in the alcohol industry, the tariffs threaten jobs and stability. The removal of U.S. spirits from Canadian stores has already begun to disrupt the market, with Kentucky bourbon—a symbol of American craftsmanship—bearing the brunt of the retaliation.

The situation serves as a stark reminder of how trade disputes, while often framed in economic or political terms, have real-world consequences for ordinary people. From the Canadian consumers who can no longer find their favorite U.S.-made liquors to the American workers whose jobs depend on cross-border trade, the fallout from these tariffs is undeniable. As the conflict continues to unfold, one thing is clear: the longer the trade war drags on, the more it will hurt people on both sides of the border.