On January 20, Ontario Premier Doug Ford stirred concerns among US winemakers by announcing a plan to remove all US wine, beer, and spirits from the Liquor Control Board of Ontario (LCBO) as a response to President Trump’s tariff threats. However, a sudden agreement between Trump and Prime Minister Trudeau on a 30-day pause on tariffs led Ford to halt his boycott. Despite this temporary resolution, the underlying tensions between the two countries linger.
The deal struck by Trump aims to negotiate a more favorable economic situation with Canada, where the details of what constitutes "fairness" remain ambiguous. Given that trade policy in Canada falls mainly under federal jurisdiction, Ford’s response options are somewhat limited. Yet, as the leader of Ontario—home to the bulk of trade impacted—his decision to target alcohol distribution is strategically symbolic. Additionally, Ford had previously aimed to terminate a significant contract with Elon Musk’s Starlink, but this too has seen a pause.
Economically, Ford’s proposed boycott was more symbolic than a measure with substantial impact. Data indicates that three provinces, including Ontario, consumed only 2.5 million cases of US wine in 2024, corresponding to merely 1.1% of US total wine production. Although some smaller wineries reliant on Canadian sales could face challenges, the overall US wine market could absorb the loss. Furthermore, US wine represents just 0.1% of all US exports to Canada, making it a minor bargaining chip.
Politically, Ford’s hardline approach resonates with his voter base and positions him as a defender of Canadian interests against Trump. A complete boycott might be reinstated if tariffs are reintroduced, serving not just as retaliation but also as a mark of defiance against US economic tactics.
Canada’s wine market has been shifting significantly, with five of the six best-selling wines being American; however, many US wines are considered to be at an above-average quality rather than irreplaceable. Though they account for about 12% of LCBO shelf space, alternative suppliers from countries like France, Spain, and Australia are well-positioned to fill any gaps that may arise from this conflict.
This ongoing dispute has fueled a ‘buy local’ movement, with the Ontario government urging citizens to prefer domestic wines and spirits. This initiative aligns with a growing trend of economic nationalism, and overall, the US share of the Canadian wine market has been diminishing over the past several years, with this current conflict poised to expedite that decrease.
In summary, while the crisis has been temporarily averted, US winemakers find themselves amid a controversial trade landscape with no definitive resolution in sight.