President Donald Trump's latest trade fight with Canada could soon spill into your cocktail glass, with a looming 50% tariff on Canadian spirits putting bars, restaurants and liquor stores on edge.
Chris Swonger, president and CEO of the Distilled Spirits Council, said the stakes cut both ways, saying the tariff could hit U.S. hospitality businesses while also potentially pressuring Canada to put American spirits back on its shelves.
"First and foremost, great thanks to President Trump because he has recognized that our industry has lost 73% of our American distilled spirits exports to Canada as a result of the provincial ban of purchasing American distilled spirits," Swonger told Fox News Digital.
"We are hopeful that an agreement will be made between the Trump administration and Canadian politicians to put American spirits back on the shelves," he added.
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The new tariff threat marks the latest escalation in a trade fight that has already sent U.S. spirits exports to Canada plunging. In retaliation for earlier U.S. tariffs, some Canadian provinces pulled American spirits from store shelves.
Trump and Canadian Prime Minister Mark Carney held last-minute talks Tuesday as the two sides raced to avert the 50% tariffs before the midnight deadline.
The tariffs cover roughly $20 billion in Canadian imports, including liquor, dairy products, vehicles, hockey equipment and other goods. Canadian whisky, vodka, gin, rum, wine and beer are among the products facing the new levy.
Canada had been a roughly $250 million annual market for American distillers before the trade dispute, but fell from the second-largest destination for U.S. spirits to sixth in 2025, according to DISCUS data previously reported by Fox News Digital. From March through December, exports plunged from $203 million in 2024 to $60 million in 2025 — a roughly $143 million drop.
The fallout has been especially significant for Kentucky, which produces 95% of the world's bourbon and supports more than 23,000 industry jobs, according to the Kentucky Distillers' Association.
Swonger said the prospect of steep tariffs on Canadian liquor could prove to be the leverage needed to persuade Canadian officials to reopen their market to U.S. producers.
"Considering applying a 50% tariff on Canadian distilled spirits would hopefully be the trigger, the forcing mechanism to get the Canadian province leaders to put American spirits back on the shelves," he said.
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The stakes extend beyond distillers on both sides of the border. Canadian whisky and other distinctive Canadian spirits are consumed by Americans at home and served by U.S. bars and restaurants, meaning a new trade barrier could reverberate through the hospitality industry.
Swonger said the U.S. historically exports roughly $220 million worth of distilled spirits to Canada annually, while Canadian producers have exported more than $500 million worth of spirits to the much larger U.S. market.
But Swonger cautioned that the American spirits industry ultimately does not want the tariffs to take effect.
He warned a 50% levy would be "absolutely devastating to the Canadian distilled spirits industry" and would have "a real impact on the American hospitality economy."
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Unlike products that can simply be swapped for a domestic equivalent, Swonger argued that spirits are distinctive products. American consumers seek out Canadian whisky, while Canadian consumers have increasingly embraced American whiskey.
The industry's preferred outcome, he said, remains a return to free trade rather than an escalating tariff battle.
"We're an industry that thrives on zero-for-zero tariffs and zero trade barriers," Swonger said.
With negotiations continuing ahead of the deadline, Swonger said distillers are anxiously waiting to see whether Trump's pressure campaign produces a deal.
"We hope we can get back to that tomorrow," he said.