Canadian flag waving in front of the Parliament Building on Parliament Hill in Ottawa. Photo by Jason Hafso on unsplash.com

This past week Canada announced it will remove retaliatory tariffs on California wine and other U.S. goods, a move that will take effect on Sept. 1. This action will de-escalate trade tensions with the U.S. and provide some relief to California winemakers hard hit by the Canadian retaliatory tariffs. The move will remove a 25% tariff — a response to earlier U.S. tariffs on Canadian steel and aluminum.

California industry leader the Wine Institute says that wineries across the country still continue to suffer economic harm from province-wide bans on U.S. wine sales. Since early March, wine, beer and spirits have been the only U.S. products completely barred from entering and being sold in the Canadian market. Before these restrictions, Canada accounted for 35% of all U.S. wine exports, with a retail value of more than $1.1 billion. 

Wine Institute CEO Robert P. Koch said in a statement on Aug. 22: “We’re encouraged by the recent engagement from President Trump and Prime Minister Carney and today’s announcement that Canada will be removing its tariff on U.S. wine. This is an important first step in putting U.S. wines back on equal footing with imports from all other major wine regions. ”

“But the job isn’t finished yet. Provincial sales bans are still blocking U.S. wines from reaching Canadian shelves across most of Canada. Lifting these remaining barriers would bring relief to U.S. wineries that have been shut out of this important market and also allow Canadian wine lovers to once again enjoy their favorite American wines. We urge both governments to make that happen quickly.”

Last spring, Canadians — including individual provinces — were removing American liquor and California wines from store shelves and pushing “Buy Canadian” to counter president Trump’s moves. Earlier this month, the Quebec liquor board announced it might have to destroy $300,000 worth of American alcohol due to impending expiration dates for products stored since March. Reports say that by mid-August 2025, U.S. alcohol exports to Canada had plummeted in the first half of the year, with distilled spirits down 62% and wine down 67%.

The Wine Institute says that American wineries have lost over $173 million in export revenue during the six-month period that the counter tariffs have been in place.

Tariffs on our exports is just one negative factor facing the wine industry in the state that also includes a decline in consumption, particularly among the younger demographic.