Canadian restrictions on US wine rattle trade

One year after Canadian provinces removed American wines from store shelves amid a trade dispute with Washington, experts say the policy has hit US producers while shifting demand toward Canadian and other foreign wines.

Full-year 2025 data released by the Wine Institute on March 4 show US wine exports to Canada fell 78 percent, representing a loss of about $357 million in export value.

For American producers, the impact has been severe, said Rod Phillips, a wine historian and professor of history at Carleton University.

"Canada was the largest export market for US wine, so this is a massive loss for American wine producers, especially in California.

"Their global wine exports are down because the US government's policies have led to boycotts of American wine in many countries," he told China Daily.

He added that American wineries may struggle to compensate for the lost sales at home.

"They're not easily able to make up the losses by selling more wine in the US itself, because wine consumption there is declining, as it is almost everywhere," he said.

While the bans have significantly disrupted US exports, Phillips said the economic costs for Canada appear limited.

"Wine importers that had big portfolios of American wine have lost business, of course, and wine retailers have lost their American wine sales," he said. "But consumers are still buying wine, and when they can't buy American wine, they buy something else."

He noted that domestic producers have benefited from the change. "Sales of Canadian wine have risen considerably because of a surge in nationalism and a trend to 'buy Canadian'," he said.

Looking ahead, he said it remains uncertain whether US wine will regain its previous position in the Canadian market.

"If the next US government continues Trump's policies, Canadian attitudes to the US will probably harden," he said. "But if there's a different administration that shows a more friendly face to Canada, some of the Canadian market for US wine will recover."

Robert Eyler, a professor of economics at Sonoma State University, noted that the impact goes beyond export sales themselves.

"The larger impacts are likely in Canadians not traveling to American wineries and also not being exposed to American wine as a way to market to them for tasting room visits, events, and other sales that are more profitable and have larger lifetime value," he said.

For producers that relied heavily on Canada, the sudden drop in demand could create short-term difficulties.

"In some cases it will have a large impact if Canada has been a focus of the market," Eyler said, adding that much depends on whether wineries can redirect their inventory to other destinations.

"These changes come at a difficult time for the wine industry generally as consumers are reducing dollars and volume of wine purchases," Eyler said. "It is just another headwind."

Replacing a market as large as Canada could be difficult, Eyler said.

"There is difficulty because of competition in other markets and for shelf space in retail," Eyler said.

He said if the restrictions persist, American producers may face a tougher battle to regain their position in the Canadian market.

"As Canada has a large amount of European and Canadian wines also fighting for customer wallets and there is a campaign in Canada to buy Canadian wine in lieu of US wines, making re-entry that much more difficult," Eyler said.

"This is a classic issue with trade protections (like tariffs)," he said. "One has to expect some retaliation."

Resolving the situation will likely require both policy changes and renewed efforts by the industry to reconnect with Canadian consumers.

"A reduction or removal of tariffs and a large marketing campaign to win back Canadian consumers and travelers that would visit and engage with US wineries," he said, would be the most realistic path toward stabilizing the trade relationship.

"The longer this rift exists, the longer the time to mend the problem."