In the wake of high tariffs placed on Canada by the US, US alcohol exports to Canada have plummeted in recent months. This was only partially due to the 25 percent retaliatory tariffs placed on US imports (were removed September 1st), which would make US wine and spirits more expensive for Canadian consumers. Rather, the decline was mostly due to a widespread Canadian boycott on American products, after Canadians felt disrespected by the rhetoric coming from one of their oldest friends and one of their largest trading partners.

Shortly after the trade war with Canada was initiated earlier this year, Canadian provinces, which control imports of alcohol and distribution to liquor stores, simply stopped ordering American wine and spirits, and moved existing inventories to warehouses. Compared to the first six months of 2024, exports of US distilled spirits to Canada fell 62 percent and US wine fell by 67 percent over the same period of 2025. This is particularly damaging for US wine producers, as one-third of their exports in 2024 went to Canada.

Discussion Questions:

1) Discuss how a boycott on US wine affects other industries in wine-producing regions.

2) Use a supply and demand model to illustrate the effect of a wine boycott on the equilibrium price and quantity of wine.