California’s wine industry anticipates further challenges as trade tensions between the U.S. and Canada escalate. President Trump announced tariffs of up to 50% on Canadian goods this week, prompting Canada to implement retaliatory tariffs on $20 billion worth of American products. Although wine was not specifically mentioned, American alcohol has faced boycotts from several Canadian provinces since March in response to earlier U.S. tariffs on Canadian goods.
With wine consumption declining, major California wine companies are laying off workers and closing production facilities. Julie Berge, vice president of communications at Wine Institute, which represents California wineries, stated that Californian wines have been significantly affected by the trade conflict.
A report from the Wine Institute indicated that U.S. wine exports totaled $805 million in 2025, a decrease of 35% from 2024, with 80% of that decline attributed to Canada, which accounts for 36% of the U.S. wine export market. The boycotts have resulted in an estimated loss of $360 million in revenue for the U.S. wine industry.
Berge noted the long-term relationships built with Canadian importers and consumers have been damaged. Some wineries have reported that Canada constituted about 85% of their international sales, describing the boycotts as devastating.
The impact of the trade conflict extends beyond the wine industry, as tourism from Canada to California has also declined, with a 20% drop in visitors in 2025. Canada has targeted other sectors, including agriculture, electronics, and transportation equipment, with its tariffs.
Berge expressed concern that prolonged boycotts would make it increasingly difficult for winemakers to reestablish their presence in the Canadian market. She highlighted that as U.S. wines are removed from Canadian shelves, other countries may take that market space.
The California wine industry is also facing challenges from declining demand and global oversupply, leading to downsizing and the disposal of excess grapes. In December, Rep. Mike Thompson (D-St. Helena) introduced a bill to reimburse American wine producers for losses incurred due to tariffs, but the Specialty Crop & Wine Producer Tariff Relief Act has not progressed despite bipartisan support.
Wineries are attempting to expand into other international markets, including Japan, the UAE, and Mexico, but rebuilding those relationships will take time. Berge emphasized that no single market can compensate for the losses in Canada.