It seems that the new round of tariffs that Donald Trump has threatened to impose on imported goods is already getting some blowback from foreign leaders. Last week, the premier of Ontario, Canada said that he might ban imports of American booze in retaliation for Trump’s proposed tariffs on Canadian products, the start of what could be a longer tit-for-tat between the two countries and the start of a trade war.
It’s not just booze—Ontario’s premier Doug Ford said that he would also consider restricting electricity going into Michigan, New York, and Minnesota. But the news about imports of alcohol will likely cause even more anxiety in an industry that is already on edge about the possible return of tariffs on American whiskey, which according to reports could reach a staggering 50 percent in the spring. Sales of alcohol in Ontario are run by a government liquor control board, which Ford would restrict from purchasing American whiskey and other spirits. “It’s a last resort,” he said in a recent Associated Press article. “I don’t think President-elect Trump wants that to happen. We’re sending a message to the U.S. If you come and attack Ontario, you attack the livelihoods of people in Ontario and Canadians, we are going to use every tool in our tool box to defend Ontarians and Canadians. Let’s hope it never comes to that.”
Trump recently said that he would institute a 25 percent import tariff on all imports from Canada and Mexico unless they actively work to shut down illegal immigration into the U.S. According to the AP, Trump tried to take a nonchalant tone about the situation. “That’s okay if he does that,” he told CNBC on the floor of the New York Stock Exchange. “The United States is subsidizing Canada and we shouldn’t have to do that. And we have a great relationship. I have so many friends in Canada, but we shouldn’t have to subsidize a country.”
According to the Distilled Spirits Council of the U.S., Canada is a major market for American whiskey. In 2023, it was in fifth place with exports of $76 million after the E.U., Australia, Japan, and the U.K. If the Trump tariffs go into effect and Ford keeps his word, this would be another significant hit on the American spirits industry, with smaller craft distilleries continuing to bear the brunt in terms of lost sales. Of course, this could all be bluster and part of the Trump policy of negotiation via threats, but we will update you on the situation as it develops.
