LOUISVILLE, Ky. – A distillery located in the heart of the American bourbon industry is finding itself on the cross of the brewing trade war between the US and Canada.
The alcohol made in the US has been removed from Canadian store shelves in retaliation for tariffs placed on products by the Trump administration.
It also leads to cancelled shipping orders and liquor agreements with potential trading partners, says several Kentucky bourbon companies.
The family-run Mishter distillery in Louisville has already lost $115,000 on a cancelled bourbon cargo order to Canada. It is the largest foreign market for liquor stores in most provinces in Canada, and is being asked to remove products from the shelves.
“That’s the reality,” said Andrea Wilson, Mishters’ chief operating officer. “We want to see less tariffs than fewer tariffs.”
Earlier this month, Trump announced 25% tariffs on two goods imported from Canada and Mexico (two of the country’s biggest trading partners) before postponing the instability of a wider trade war.
On Tuesday, Trump amplified his strict tariff talk, saying it would double the tariffs imposed on steel and aluminum imported from Canada.
The threat comes after Ontario’s prime minister, leader of Canada’s most populous province, announced that he would charge 1.5 million Americans 25% for electricity.
According to the Kentucky Distillers Association, the Kentucky bourbon industry pours around $9 billion into the local economy each year.
The state produces around 95% of the bourbon sold worldwide, the association estimates.
Although data on the impact of tariffs is not available, US consumers are likely to not see price increases in bourbon for at least a few months, said Marten Lodewijks, president of the US division of IWSR, a US beverage industry data company.
However, he said Kentucky Distilleries can feel in a pinch immediately if some of their cargo to Canada is cancelled.
Wilson said he fears that if the tariff war continues, business could face further losses.
“If we don’t sell to the biggest export market, it has a huge impact on our business and is very sad for us. We have friends so we’ve been building relationships in that country for a long time,” she said.
The black-owned brother distillery in Louisville has its own problems caused by the tariff war.
The company was in the midst of negotiations to sell its first product in Canada, but the debate ended abruptly when the trade war began.
The transaction “as soon as the tariffs are announced,” CEO Victor Yabrow said.
“Literally, we’re in the middle of an expansion. Everything is stopped and we don’t have the ability to buy,” Yarbrough said, and his plan for 2025 was to add to shipping alcohol to France and the UK.
Now he is considering sending his product to South Africa and Brazil, but Canada would have been a bigger market.
“I just can I help you get back to Square One? We have, you know, you know, how can we promote the relationship we have?” he asked.
FawnWeaver, the founder of Uncle Uncle, a black-owned Tennessee whisky brand, has pulled her alcoholic products off the Canadian shelves, but says she’s already dressed up for fallout.
Weaver, who argued that tariff wars could be predicted during the presidential election, said tariffs mean that her business is not so aggressive in the global market for now.
“As an independent brand, I can’t afford those tariffs. I can’t afford to absorb it and can’t communicate it to consumers,” she said. “We can argue that this is exactly what the current administration wants.
She added: “We already knew we were going to go into this. Trump was very clear what he was trying to do, despite not knowing where the tariffs would hit.”
Kailani Koenig and Maggie Vespa reported Deon J. Hampton of Denver and Bracey Harris of Mississippi from Louisville.
