‘That’s a significant impact to our business’: Kentucky distilleries feel the squeeze after Canada pulls U.S. liquor from shelves. Here’s how tariffs can affect consumer prices in America
Michter’s Distillery, a family-owned distillery in Louisville, Kentucky, has already lost $115,000 in canceled shipments to Canada, its largest foreign market. The loss comes as many Canadian liquor stores are removing U.S. products from their shelves.
“If we’re not selling to our largest export market, that’s a significant impact to our business, and it’s very sad for us, because we have friends, we’ve built relationships in that country for a long time,” Andrea Wilson, chief operating officer of Michter’s, shared with NBC News.
Trump had announced 25% tariffs on imports from Mexico and Canada, but he later postponed those tariffs until April. The President then threatened to double the tariffs on steel and aluminum coming from Canada.
Despite the uncertainty about what tariffs are in effect, when they will be implemented and at what rate, U.S. companies and the economy at large are feeling the impact of a burgeoning tariff war.
Kentucky’s bourbon industry generates $9 billion annually and employs 23,100 people, according to the Kentucky Distillers’ Association. The association also estimates the state produces 95% of the world’s bourbon supply — which means disruptions to the industry could have long-reaching effects on the companies that make it, as well as the state of Kentucky.
Wilson said she fears her business could face further losses if the tariff war continues. “That’s the reality of it,” Wilson said. “We would prefer to see less tariffs than more.”
Fawn Weaver, founder of Black-owned whisky brand Uncle Nearest, has also had her product pulled from Canadian shelves. She saw it coming months ago, but for now, the tariff war means her brand can’t be as competitive in the global market.
“We already knew coming into this, Trump was very clear in what he was going to do, even though we didn’t know where the tariffs would hit,” she told NBC News.
Brough Brothers Distillery, a Black-owned distillery in Louisville, is facing a different challenge. The company was negotiating with Canada to sell its products north of the border for the first time, but the deal fell through as soon as the tariffs were announced.
“Literally, we’re in the middle of expansion,” said CEO Victor Yarbrough. “Everything’s been suspended, they don’t have the ability to purchase.” Yarbrough said his company also planned to ship alcohol to France and the United Kingdom, but now he’s considering South Africa and Brazil, which are smaller markets.
Tariffs don’t just affect American exports like bourbon — they also drive up costs for imported goods. While President Trump claims other countries pay the tariff on goods imported into America, it’s actually U.S. companies footing the bill — and they often pass those costs on to consumers.
“If there is a significant increase in tariffs… those costs will likely be passed onto U.S. consumers and businesses,” Brian Peck, executive director of the University of Southern California’s Center for Transnational Law and Business, shared with CBS News Los Angeles.
The Peterson Institute for International Economics predicts Trump’s tariffs on imports from Canada, Mexico and China could raise prices for American households by $1,200 annually. These tariffs affect a wide range of products, including groceries, automobiles and electronics.
The Budget Lab puts the estimate even higher, saying average American families can expect to pay between $1,600 and $2,000 more per year.
In the automotive sector, tariffs on steel and aluminum could lead to price increases across all vehicles, impacting both imported and domestically-produced models. Experts estimate prices could increase by $4,000 to $12,500, depending on the vehicle.
“There is no way you’re going to see a better discount if you wait three months,” Ivan Drury, director of insights at Edmunds told NBC News. “That’s guaranteed.”
Food prices are likely to rise as well. According to the USDA, the U.S. is Mexico’s most significant agricultural trading partner, with nearly 92% of Mexico’s agricultural exports coming to America.
As for Canada, the U.S. imported $40 billion worth of potatoes, canola oil, beef, pork and grains from our neighbors to the north back in 2023. If those imports were to be subjected to 25% tariffs, that could drastically increase consumers’ grocery bills, depending on how much of the cost businesses pass on to American consumers.
As negotiations continue, one thing is clear: tariffs have ripple effects that extend far beyond bourbon exports. Whether it’s the cost of a bottle of liquor, a new car or a trip to the grocery store, tariffs can significantly increase household budgets.
To navigate rising costs, American consumers can look for alternative brands, buy in bulk or take advantage of sales and loyalty programs to soften the impact on their wallets.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
