Significant Decline in American Wine Exports to Canada Reaches 97%
The trade relationship between the United States and Canada has taken a turn for the worse, with American wine exports to Canada seeing a dramatic decrease in 2025. This decline is primarily due to trade tensions and tariff fears triggered by U.S. policy announcements.
In June 2025, American wine exports to Canada were almost at zero, marking a 96.8% drop compared to the same month in 2024. The drop was even more pronounced in May, with a 97.1% decrease from the same month in the previous year.
The anticipation of potential tariffs on U.S. wine and spirits caused provincial liquor boards and private distributors in Canada to sharply pull back orders, resulting in a historic 72.5% year-over-year collapse of U.S. wine exports to Canada in March 2025.
Other contributing factors to the export decline include COVID-19 supply chain disruptions, currency instability, inflation, and conservative regulatory adjustments by Canadian liquor boards.
The potential long-term effects on the American wine industry from this export collapse may include loss of a key export market, lower economies of scale, increased market uncertainty and risk premiums, and a possible permanent shift of Canadian distributors and consumers to other suppliers. Prolonged trade tensions could also prolong or deepen supply chain and pricing challenges, impacting the overall U.S. wine industry's global competitiveness.
Interestingly, Canadian wine benefits from tariff exemptions under the USMCA, which could counterbalance future trade pressures. These tensions highlight the fragility of U.S.-Canada wine trade in the face of evolving trade policies.
The drop in wine sales mirrors the broader tensions between the U.S. and Canada that began after President Trump took office. If the current level of trade activity persists through the end of the year, American winemakers may lose an additional $240 million.
Canada was once the biggest international market for American wine, but this position has been lost in the past few years. The trade war between the U.S. and Canada could have long-term effects on American winemakers, potentially reshaping the global wine market.
The decline in U.S. whiskey exports to Canada has been similarly dramatic. In June 2025, U.S. whiskey exports to Canada fell 72% year over year, while for the first half of 2025, U.S. whiskey exports to Canada are down nearly 50%. This represents a loss of about $19 million for the first half of 2025.
Tensions between the countries were exacerbated by President Trump's remarks about making Canada a 51st state, further fuelling trade anxieties. Canada is a significant market for upscale wine in America, especially for fine wine makers.
In response to these tensions, a "buy local" movement has emerged in Canada, with consumers seeking alternatives to American products during the trade war. As the situation unfolds, it remains to be seen how the U.S. and Canadian wine industries will adapt and recover from these trade pressures.
[1] Source: Wine Business Monthly [2] Source: Wine Spectator [3] Source: Canadian Vintners Association [4] Source: The Globe and Mail [5] Source: National Wine and Grape Association
Despite the escalating trade tensions between the United States and Canada, the sports world remains untouched, with top athletes continuing to compete in various sports leagues. Unfortunately, the same cannot be said for the wine industry, as the trade war has caused a historic decline in wine exports from the U.S. to Canada, affecting both mainstream and upscale wine makers.
