7 Traits of a Successful Liquor Store Licensee
November 25, 2024
How a Liquor Store Consultant Can Help You Ace Your Liquor Retail Annual Strategic Planning
December 13, 2024
Near the end of November, President-Elect Donald Trump announced on Truth Social that on day one of taking office, he will sign an executive order imposing a 25% tariff on imports from Canada and Mexico to the United States. Trump posted “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem.”
Over the course of his campaign, Trump incorrectly described tariffs as a tax on the exporting country. In fact, tariffs would be paid by U.S. importers of Canadian products, although they would have a negative impact on both sides of the border. U.S. companies would pass the additional cost on to American consumers who in turn would buy less Canadian product – a lose-lose proposition.
The U.S. is Canada’s largest trading partner (and vice versa). In 2023, $3.6 billion (CAD) of goods and services crossed the border every day. The tariffs would affect many sectors, including Canadian whisky manufacturing.
How Trump Tariffs Could Affect Canadian Whisky
The U.S. is the largest importer of Canadian whisky and whisky distillers large and small rely heavily on that cross-border trade. Increased whisky prices in the U.S. would probably result in Americans shifting their dollars toward cheaper domestic whiskeys. The tariffs add insult to a decade of injury for the Canadian whisky market. While premium whisky sales have been on the rise globally in recent years, overall Canadian whisky sales have been in decline over the past decade. According to WhiskeyCast, Canadian whisky sales to the USA peaked at 312.1 million in 2014 and declined to 202.5 million by 2023.
Major manufacturers like Diageo, producer of Crown Royal (the second-best-selling whisky in the U.S. after Jack Daniels), and Suntory, producer of Canadian Club, may face significant losses, although they can fall back on global markets somewhat. For smaller Canadian distillers without that global reach and heavily dependent on U.S. trade, tariffs could be an existential threat.
Thrive Advisors – BC’s Most Trusted Liquor Consultants
Thrive Liquor & Cannabis Advisors provides liquor licensing and retail strategy services to BC liquor retailers, pubs and restaurants. If you run a liquor business in BC, you’ll thrive with Thrive on your side.
