Every year, Canadians spend hundreds of millions on their favorite American alcoholic drinks. However, a possible trade war between the two nations could dampen the spirits of Canadian alcohol enthusiasts.

The U.S. President, Donald Trump, may impose tariffs on Canada as early as next week. This raises the possibility of Canada retaliating with its own tariffs on the U.S., leading to fears of a trade war. Canadian Prime Minister Justin Trudeau has warned that if the U.S. imposes tariffs on Canada, they will respond in kind.

One possible target for these counter tariffs is American alcohol. In 2023, U.S. alcohol exports to Canada were valued at US$262 million (C$377 million) annually, with American whiskey accounting for US$76 million (C$110 million) of that total.

These tariffs could discourage Canadian consumers from purchasing U.S. alcohol. The impact of tariffs on consumer behavior was evident during Trump’s previous tariff conflict with the European Union, which resulted in a significant decrease in American whiskey exports to the EU.

Experts suggest that if the price of American alcohol increases due to tariffs, some consumers may still choose to purchase their preferred brands, while others may begin to explore alternatives. This could be an opportunity for Canadian distilleries, and a chance for consumers to rediscover Canadian whiskey.

The situation may also lead to an increase in the popularity of Canadian craft beer and wines from domestic wine-growing regions like Niagara Falls, Ontario, and British Columbia.

In the event of a tariff war, consumers could also explore non-alcoholic options or look for recipes to make mocktails. Regardless of the outcome, this potential trade war serves as a reminder for Canada to consider diversifying its trade partners.