On Feb. 1, President Donald Trump made good on his promise to impose stiff tariffs against Canada, Mexico and China. The move brought immediate responses.

The U.S. tariffs amounted to 25% on most goods from Canada and Mexico, and 10% on goods from China. Quickly, Canada and Mexico announced retaliatory actions, as reported by The Associated Press. (Editor’s note: The New York Times reported late this morning that Mexico has reached a deal with the U.S. to delay the tariffs for one month.)

Canada will impose retaliatory tariffs of 25%, while Mexico had not yet announced specifics, as of this writing. But parts of Canada are taking it farther – Canada’s BC Liquor Distribution Branch announced it will stop buying U.S. products effective immediately. In addition, products from many Red states in the U.S. will be taken from retail shelves.

The spirits industry had plenty to say about the emerging Trade War.

Regarding certain spirits products, including whiskey and bourbon, being pulled from shelves, Distilled Spirits Council of the United States President Chris Swonger had this to say:

“This retaliation targeting American spirits is extremely disappointing and counterproductive. Taking American spirits off the store shelves will needlessly reduce revenues for the provinces and hurt Canadian consumers and hospitality businesses. Some spirits are recognized as ‘distinctive products’ by the U.S. and Canada and can only be made in their designated countries such as Bourbon and Tennessee Whiskey in the U.S., and Canadian Whisky in Canada.  

“As a result, the production of these products cannot simply be moved to another country or region. We urge the U.S. and Canada to work together to reach an agreement that continues to foster a thriving spirits industry between our two countries.”

In addition, the Distilled Spirits Council, the Chamber of the Tequila Industry and Spirits Canada released a joint statement on the situation.

“Our associations are committed to working collaboratively with all stakeholders to explore solutions that prevent potential tariffs on distilled spirits,” the statement read. “We are deeply concerned that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry.”

The statement called for maintaining fair and reciprocal duty-free access for all distilled spirits in order to maintain growth and save jobs in all three countries: “Our industries have thrived due to the level playing field established across our borders.

“The North American spirits sector is highly interconnected. Many companies own brands in all three countries, contributing positively to local economies. Certain spirits, such as Bourbon, Tennessee Whiskey, Tequila and Canadian Whisky, are recognized as distinctive products and can only be produced in their designated countries. Bourbon and Tennessee Whiskey can only be made in the U.S., Tequila in Mexico, and Canadian Whisky in Canada. The imposition of a tariff not only negatively impacts trading partners but also harms domestic industries.”

The statement asserts that since the 1990s, trade in spirits in North America has been largely tariff-free, resulting in significant growth. U.S.-Canada trade in spirits increased by 147%, while U.S.-Mexico trade surged by 4,080%, the statement reported. 

Per the AP, Canada is the largest export market for 36 U.S. states, while Mexico is the largest trading partner of the U.S.

“This demonstrates how vital our cooperative efforts have been for job creation and economic stability,” the joint statement asserted.

“However, recently the North American spirits sector is experiencing a slowdown due to the continued impact of COVID and economic factors like inflation. This slowdown will be exacerbated if a cycle of tariffs and matching retaliation begins, and the impact will be felt not just by the distilled spirits industry, but also by consumers and the struggling hospitality sector, which is still recovering from the pandemic.

“We urge all parties to engage in constructive dialogue to address these concerns proactively and maintain our shared commitment to a thriving spirits industry across North America.”

-Kevin Gibson

Read more: KDA Warns of Negative Effects From Looming Tariffs