NASHVILLE, Tenn. (WKRN) — Everyone knows Tennessee whiskey. In 2022, distilleries contributed more than $3 billion statewide.

But that success is facing a new hurdle: trade tensions between the U.S. and Canada.

A new report shows American liquor exports to Canada have dropped 85% this year after several Canadian provinces banned American spirits from their shelves. The move came in response to new tariffs announced by President Donald Trump, reigniting a trade dispute that's hitting distillers close to home.

At Southern Collective in Nashville, CEO Tricia Brill said expanding internationally was always part of the plan.

"By the time we got around to exporting to Canada, the tariffs were in place and destroyed our dream of expanding overseas," Brill said. "It's just not worth it for a small distillery like ours right now. We have to be really picky and choosy about where we export to."

The company opened in 2022 with optimism, expanding into European markets like Germany and the Netherlands.

This year, after Trump reinstated sweeping tariffs on imported steel and aluminum, Canada retaliated. The country placed certain restrictions on American-made products, including liquor.

"It's always in the back of my mind," Brill said. "I'm constantly working with distributors and trying to build relationships, but it feels like there's a wall in the way of what we want to do."

Meanwhile, Trump has defended the tariffs, telling reporters on Air Force One Monday: "Canada has been ripping us off for a long time, and they aren't going to rip us off anymore."

That comment comes after he canceled trade talks with Canada after an ad aired featuring a clip of former President Ronald Reagan warning against tariffs. It aired during the World Series.

The Reagan Presidential Foundation and Institute later said the Canadian ad "misrepresents" Reagan in the 1987 address.

Soon after, Trump posted to his Truth Social account:

BASED ON THEIR EGREGIOUS BEHAVIOR, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED

While global names like Jack Daniel's can ride out the storm, newer distilleries depend on international sales to grow.

"At this point, we just don't see it's worth it," Brill said. "We'd have to export quite a bit to make it worth our while — and we're just a smaller operation."

News Source : https://www.wkrn.com/news/tennessee-news/tennessee-distilleries-feel-the-impact-of-u-s-canada-trade-tension/