Toronto, ON – July 21, 2026
Spirits Canada is disappointed by the United States government’s announcement that it intends to impose a 50 per cent tariff on Canadian spirits and other selected Canadian products, effective August 19, 2026. The announced measure places one of Canada’s most successful export sectors at significant risk and underscores the urgent need for a coordinated, negotiated solution between both countries.
For nearly four decades, since the Canada–U.S. Free Trade Agreement (formerly NAFTA) and continuing under CUSMA, Canadian spirits have moved tariff-free across the shared border and has supported investment, job creation, innovation and economic growth in both countries. On August 19, they will go from a zero tariff to a 50% tariff overnight and threatens 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 United States 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% of all Canadian spirits production is destined for the United States, 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 (RTD) 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% of Canada’s total spirits exports were destined for the U.S. market with the remaining 7% destined for other markets. 48% of spirits production in Canada is tied to U.S. demand, leaving limited alternatives of replacing that demand in the near term.
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 August 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 coordinated 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.”
Quick Facts
- Canada produces nearly $2 billion in spirits annually.
- Approximately 50% of Canadian spirits production is tied to the demand in the U.S., leaving limited alternatives of replacing that demand in the near term.
- In 2025, Canada exported $948.6 million in spirits to the U.S., representing approximately 93% of Canada’s total spirits export value.
- Only about 7% of Canadian spirits exports currently go to markets outside the United States.
- The Canadian spirits sector contributes approximately $5.8 billion to Canada’s GDP.
- The industry supports nearly 48,800 full-time equivalent (FTE) jobs across Canada.
- The sector generates more than $2.66 billion annually in government tax revenues.
- Following provincial delisting of U.S. spirits:
- Total Canadian spirits sales declined approximately 4.4% by volume and 4.2% by value.
- Canadian spirits volumes remained essentially flat (+0.1%).
- Since the implementation of NAFTA and continuing under CUSMA , trade in distilled spirits across North America has been largely tariff-free, supporting decades of growth, investment and consumer choice.
Relevant Links
- Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Alcoholic Beverages – The White House
- ANNEX-I-2.pdf
- Annex-II-1.pdf
- Spirits Canada: Removal of U.S. Spirits from Canadian Stores in Retaliation to U.S. Trade Dispute Resulted in Sharp Sales Decline of U.S. Products, Canadian Products and Total Spirits Sales
About Spirits Canada
Spirits Canada is the national trade association representing Canadian spirits manufacturers, marketers and exporters. The Canadian spirits sector contributes approximately $5.8 billion in value-added GDP to the Canadian economy, supports nearly 48,800 full-time equivalent jobs, and generates more than $2.66 billion in government tax revenues annually.
Media Contact
Via Dulay
Director, Communications
Spirits Canada
via.dulay@acd.ca
