LOUISVILLE, Ky. — With a new distillery set to open soon, the makers of Brough Brothers bourbon in Kentucky were ready to put their business plan into action. They were looking to ramp up whiskey production to break into lucrative new markets in Canada and Europe.
No American whiskey is displayed at an LCBO, the government-run liquor stores where most wine and spirits in the province are purchased, March 9 in Toronto.
Now the on-again, off-again threat of tariffs has disrupted those plans.
Efforts by the Black-owned distiller to gain a foothold in Canada are on hold, as are plans to break into Germany and France, said Brough Brothers Distillery CEO Victor Yarbrough. That's because the iconic American spirit's widening global appeal is caught in the crossfire of trade conflicts instigated by President Donald Trump.
"It’s extremely frustrating,†said Yarbrough, who started the Louisville distilling company with his brothers, Bryson and Chris. “We are collateral damage.â€
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An employee pours a glass of The Bard's product in what will be a new production area at The Bard Distillery on March 9 in Graham, Ky.
Trump on Thursday threatened a 200% tariff on European wine, champagne and spirits if the European Union goes forward with a planned 50% tariff on American whiskey April 1 — retaliation for Trump's steel and aluminum tariffs on the EU. Trump has separate tariff plans on Canada, Mexico and China.
For distillers looking to sell to consumers of all political stripes, talking politics can be as distasteful as discussing Prohibition. But along with the turmoil and uncertainty over tariffs, bourbon makers and other U.S. firms trying to do business in Canada are confronting public relations challenges still reverberating from the president's blunt-force “America First†approach to international relations.
With Canadian hockey fans booing the U.S. national anthem and some liquor stores north of the border clearing American spirits from their shelves even before there’s clarity over tariffs, businesses like Brough Brothers are watching to see how the trade conflict plays out.
In the building being converted into the new distillery near the Ohio River, drywall dust covers the floor of the project that the brothers hope will raise the company's profile in the ultra-competitive bourbon world.
Victor Yarbrough, CEO of Brough Brothers Distillery, removes the cover from an empty barrel of bourbon in the under-construction facility March 8 in Louisville, Ky.
“I believe there’s going to be some type of repair of the relationships that needs to happen," said Yarbrough, who was hoping before the trade war erupted to introduce his bourbon in New Brunswick and later expand to Ontario and other parts of Canada.Â
The trade wars pose an immediate threat to an American-made success story, built on the growing worldwide taste for bourbon, Tennessee whiskey and other products.
Kentucky Democratic Gov. Andy Beshear said the president's zig-zagging tariff policy is hurting the American economy and will lead to higher consumer prices while disrupting business.
“It’s not just the imposition of tariffs, it’s this month-to-month, ‘I may do it to you at any moment’ policy,†said Beshear, a potential presidential candidate in 2028.
Kentucky's popular bourbon industry has fallen victim to retaliatory tariffs imposed by Canada. (Scripps ÃÛèÖÖ±²¥ Group)
Trump on March 6 postponed 25% tariffs on some imports from Canada for a month amid fears of the economic fallout from a broader trade war. Yarbrough said his company's expansion plans are still in limbo.
“It doesn’t change our situation," he said. “Just as quickly as it changed to a reprieve, it could just as quickly turn into next month that we’re back on.â€
For an industry that has to plan well into the future, based on aging its whiskey products, such angst is widespread in Kentucky, which produces 95% of the world's bourbon supply.Â
“The issue for us is long-term planning, and a postponement does nothing for us in long-term planning except leaves it still up in the air," said Judy Hollis Jones, president and CEO of Buzzard's Roost in Louisville, which sells to two provinces in Canada and has been looking to expand.
A sign is posted on a wine shelf at an LCBO, the government-run liquor stores where most wine and spirits in the province are purchased, March 9 in Toronto.Â
The Kentucky Distillers' Association says the newest trade conflicts feel like deja vu. The industry group has long sounded the alarm that tariffs and retaliatory levies would wreak havoc on the spirits industry.Â
That trans-Atlantic dispute is a reprise of Trump’s first-term tariffs on European steel and aluminum. The EU’s retaliatory tariff caused American whiskey exports to the EU to plunge 20%, costing distillers more than $100 million in revenue from 2018 to 2021, the Distilled Spirits Council says. Once the tariff was suspended, EU sales rebounded for American distillers.
Now, Europe's infatuation with Kentucky bourbon and other U.S. spirits is threatened by the potential 50% tariff — double the previous levy — that would inflict "irreparable harm to distillers large and small,†said Chris Swonger, the council’s CEO.
Tariffs amount to a tax, which whiskey producers can either absorb in reduced profits or pass along to customers through higher prices — and risk losing market share in highly competitive markets. In 2024, the EU was by far the largest export market for U.S. distilled spirits, followed by Canada, the council said.
Large distillers possess the capital and market reach to ride out disruptions caused by tariffs — built-in luxuries that most small producers don't have.
Canada accounts for just 1% of total sales for Brown-Forman Corp., the maker of Jack Daniel's Tennessee Whiskey, and the Louisville-based company could withstand disruptions there, said its CEO, Lawson Whiting.
But Whiting said the decision by Canadian provinces to take American products off store shelves is “worse than a tariff because it’s literally taking your sales away.†He called it “a very disproportionate response to a 25% tariff.â€
For Tom Bard, another Kentucky craft distiller, the risk is that all his hard work to gain a foothold in Canada could evaporate due to the cross-border trade conflict.
Bard and his wife, Kim, own The Bard Distillery in Muhlenberg County in western Kentucky. Their products had penetrated British Columbia and Alberta, but a new purchase order for north of the border is on hold amid Trump's ever-changing trade war.
“That hurts,†Bard said. “For a small distillery like us, where every single pallet that goes out the door makes a huge difference, that’s huge for us.â€
As tariffs loom and global currency values fluctuate, goods from these top US trade partners may shift in price
As tariffs loom and global currency values fluctuate, goods from these top US trade partners may shift in price
Since his reelection, President Trump has followed through on campaign promises to impose tariffs on America's biggest trading partners—Canada, China, and Mexico—in an attempt to further his terms on trade, borders, and drug trafficking crackdowns. But the tariff threats, reversals, deals, and reprisals are leaving consumers, businesses, and economists experiencing whiplash about what's going to happen next.
Tariffs are import taxes on foreign goods, but it's not foreign companies who pay them. When the United States slaps a tariff on Chinese steel, . Fees are collected by Customs and Border Protection agents at ports of entry, and into Treasury coffers. When tariffs rise, those companies face a choice:Â If they can't find domestic sources for necessary goods, they must eat the cost and watch their profits shrink, or pass the rising fee on to consumers through higher prices.
While the rationale behind Trump's approach to tariffs may be to increase revenue, balance trade, and assert dominance over rival countries, those outcomes are far from certain. Tariffs not only run the risk of raising prices, but in some cases, they also up the ante for U.S. exports by creating a game of brinkmanship. For example, when in early February, Beijing swiftly responded by targeting American energy with 15% tariffs on coal and natural gas, and 10% duties on crude oil and farm equipment.
Because China exports more to the U.S. than it imports, it is limited in its ability to match Trump's tariffs one for one. So this time China has added additional measures to strike back and cause other forms of financial and business hardship. China's Ministry of Commerce also launched an antitrust probe into Google and blacklisted two American firms—fashion powerhouse PVH Group, which owns global clothing brands Tommy Hilfiger and Calvin Klein, along with biotech firm Illumina. China also restricted exports of critical minerals like tungsten and tellurium, essential ingredients for everything from smartphones to electric vehicles.
Meanwhile, on Canada and Mexico after securing border security commitments. Canada pledged $1.3 billion Canadian dollars (or $915 million USD) for border investment and appointed a new so-called fentanyl czar, while Mexico agreed to deploy 10,000 National Guard troops along its northern border in an attempt to curb drug trafficking and crime.
For consumers, the impact could soon appear in everyday purchases. Those surprisingly affordable flat-screen TVs might see price hikes as tariffs bite into foreign brands' margins. due to the industry's reliance on Chinese raw materials. could get pricier.
Trade tensions , which is good news for American tourists but potentially devastating for U.S. exporters trying to compete in global markets.
It's a high-stakes game of economic chicken where every move ripples through global supply chains—and in some cases, consumers pay the biggest price. Whether this aggressive approach leads to new trade, border, and drug crackdown deals—or simply deeper economic and political tensions—remains to be seen, but one thing is certain: Consumers and businesses on both sides of the Pacific are bracing for impact.
used Census data to explore how the price of top imports from the U.S.'s leading trade partners may shift due to tariffs and currency values. The top imports were calculated by ranking both the total import value in U.S. dollars, and the share of total U.S. imports of that commodity from the country as of 2023.
Canada
Critical supplies like fertilizer and construction materials hang in the balance of any potential trade dispute between the U.S. and Canada. Our northern neighbor's dominance in rapeseed oil—which contributes to animal feed and biodiesel, among other uses—and fertilizer exports to the U.S. (98% and 86%, respectively) means any disruption could increase both American farmers' production costs and cut into food manufacturers' bottom lines. That potentially means higher prices at the grocery store and the gas pump. It could also for households that rely on heating oil, up to 30 cents per gallon.
Workers in U.S. if Canadian wood products and aluminum become harder to source. Consumers, already wrestling with sky-high prices and persistent inflation, could see everything from home renovation costs to certain Canadian-assembled vehicles get pricier, .
Because Canada's economy largely relies on the export of commodities, its currency is prone to fluctuations, particularly during times of volatility. The U.S. and Canadian dollars have a close relationship; aluminum and steel, two major exports from Canada to the U.S. may be impacted amid ongoing tariff uncertainty that began in early 2025.
But the possibility of tariffs remains, which could bring business activity down and and weaken the currency by making it less attractive to foreign investors.
China
China's grip on U.S. tech supply chains runs deep, for everything from smartphones ($54.6 billion in import value) and computers ($39 billion in import value) to gaming consoles (where China supplies 80% of U.S. imports).
Higher component costs and supply disruptions could force U.S. tech companies to accept lower profit margins and cut costs, including wages and jobs, . This has a profound effect on American software developers, engineers, and manufacturing workers who designed and built these devices, .
For consumers already struggling with high prices, trade tensions with China could mean significantly higher prices on like phones, laptops, and gaming systems, while the increased costs of electric vehicle batteries and automotive components could push new car prices even higher.
Even though China was the first country that Trump imposed new tariffs on in his second term, , with its fixed exchange rate, is than when he took office. China's targeted but limited reaction leaves open the possibility of a bigger trade deal to avoid a full-throated trade war.
Mexico
U.S. and Mexican auto industries are deeply intertwined through $32.8 billion in vehicle trade and complex supply chains that account for 75% of U.S. auto imports. A disruption in trade between the two countries , from assembly line staff to dealership employees. It could also .
American shoppers already dealing with higher grocery bills could see even steeper prices for everyday items like (where Mexico supplies 83% of imports), making weekly shopping trips more expensive for already stretched household budgets. Various tariff threats have sent the already volatile peso swinging this year, from . If the threatened 25% tariffs do go into effect, experts say the peso could fall even further, and Mexico's economy could slide into recession.
Story editing by Alizah Salario. Additional editing by Elisa Huang. Copy editing by Tim Bruns.
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