As the Victoria Day long weekend approaches, marking one of the busiest periods for alcohol sales, Canadians are facing their second year without access to American liquor. This absence of American products from Canadian liquor stores since early 2025 has significantly impacted the U.S. wine industry, leading to a substantial decline in wine exports to Canada.
Trade data from the U.S. Census Bureau reveals that wine exports from the U.S. to Canada plummeted by $343 million US between 2024 and 2025, representing a 77% year-over-year decrease. The ban on American alcoholic beverages in most Canadian liquor stores, initiated in retaliation for President Donald Trump’s tariffs, has persisted since March 2025. Only Alberta and Saskatchewan have seen partial sales resumptions due to liquor store privatization.
A recently published report highlighted the alcohol ban as a key concern for the U.S. in upcoming trade talks with Canada. The report also cited other contentious issues like supply management, procurement policies, and the Digital Services Tax. The U.S. has urged Canada to restore immediate and permanent access for American alcohol products in all provincial and territorial markets.
Following the decline in wine exports to Canada, the U.S. experienced a notable drop in wine exports to China as well. This underscores the significant impact Canada has had on the U.S. wine trade. While U.S. winemakers found new customers in countries like South Africa, Belgium, Japan, and the United Arab Emirates, the increase in exports to these nations could not offset the substantial losses in other markets.
Apart from the trade conflict, the U.S. wine industry is grappling with a global decline in demand. Factors such as the rising popularity of ready-to-drink cocktails and seltzers, shifting consumer preferences, and health concerns related to alcohol consumption have contributed to a decrease in wine sales. The U.S. trade surplus with Canada, particularly in wine exports, has diminished significantly since the trade war’s inception.
In contrast to the decline in liquor exports, Canada has seen an increase in spirit imports from the U.S., including whiskies and ready-to-drink cocktails. The beer trade, on the other hand, was already facing challenges before the trade war, with a long-term slowdown attributed to the rise of microbreweries and changing consumer preferences. Steel and aluminum tariffs have also added to the production costs for beer manufacturers.
Despite the impact on American alcohol sales, Canada is not immune to the trade war’s effects. The LCBO in Ontario reported a significant revenue decline due to the absence of American liquor sales. However, this void has led to a surge in domestic wine sales, particularly Ontario VQA wines. While the trade tensions have affected various U.S. states, including California, the broader implications of the trade conflict are being closely monitored as the Canada-U.S.-Mexico Agreement faces a review this year.
The deadline for renewing the agreement is set for July 1, with trade negotiations ongoing to address the existing trade challenges between the three North American countries. The trade dispute’s impact on the alcohol industry, coupled with broader economic considerations, underscores the complexity of the current trade landscape.
