Category: Trade

In 2025, U.S. spirit exports to Canada collapsed as a direct consequence of escalating trade tensions, marking one of the sharpest declines in cross-border alcohol trade in recent history. Prior to 2025, Canada accounted for about 11% of U.S. distilled spirit exports. Between 2022 and 2024, Canadian imports exceeded $250 million annually, making Canada the second-largest market for American whiskey, bourbon, rum, and other distilled spirits (USDA, 2025). In March 2025, Canada effectively halted imports and sales of U.S. wine and spirits in retaliation for tariffs imposed by President Trump on Canadian goods. Provincial liquor boards removed American products from shelves, triggering a dramatic plunge in U.S. spirit exports (DISCUS, 2025). Canada also imposed a 25% retaliatory tariff on U.S. distilled spirits and other products in March 2025, which was lifted in September (Government of Canada, 2025). However, the impact far exceeded what would be expected from a 25% tariff alone, underscoring the severity of the trade dispute.

Figure 1 shows monthly U.S. spirit exports to Canada (in million proof liters), comparing the 2022–2024 three-year average with 2025. The data show a sharp and sustained decline in 2025 relative to historical levels. From 2022 to 2024, monthly exports typically ranged between 1.2 and 2.3 million proof liters, peaking during summer months. In stark contrast, exports in 2025 fell dramatically after February, dropping from 1.4 million proof liters in February to just 0.2 million in April, and averaging less than 0.4 million proof liters per month for the remainder of the year. Overall, 2025 marks an unprecedented contraction in Canadian spirit imports from the United States. In terms of value, U.S. spirit exports to Canada averaged over $160 million between March and September in years prior. However, exports in 2025 during the same period were only $35 million (USDA, 2025). Comparing March through September, American distilled spirit sales to Canada were down approximately almost 80% compared to the prior three-year average, underscoring the severe impact of trade restrictions.

Such a steep decline signals fundamental shifts in cross-border alcohol trade that may not be reversed by tariff removal alone. The restrictions on U.S. spirits were not merely retaliatory; they appear to have stimulated domestic production and potentially redirected Canadian consumers toward local and alternative sources. The long-term effects remain uncertain. However, it is noteworthy that imports of oak casks and barrels—essential for aging spirits—rose by 6% during this period (USDA, 2025), suggesting increased investment in Canadian distilling capacity.

Figure 1. U.S. spirit exports to Canada: 2022-2024 and 2025

References

Distilled Spirits Council of the United States (DISCUS) (2025). Removal of U.S. Spirits from Canadian Stores in Retaliation to U.S. Trade Dispute Resulted in Sharp Sales Decline of U.S. Products, Canadian Products and Total Spirits Sales. https://distilledspirits.org/news/spirits-canada-analysis-removal-of-u-s-spirits-from-canadian-stores-in-retaliation-to-u-s-trade-dispute-resulted-in-sharp-sales-decline-of-u-s-products-and-total-spirits-sales/

Government of Canada (2025). https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html

U.S. Department of Agriculture (2025). Global Agricultural Trade System. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew. “Trade War Fallout: The Collapse of U.S. Spirit Exports to Canada in 2025.” Southern Ag Today 5(51.4). December 18, 2025. Permalink

Recently, the Trump administration announced tariff exceptions on some agricultural products, including beef, tea and coffee, fruit juice, cocoa, spices, bananas, oranges, tomatoes, and certain fertilizers. Imports account for over ninety percent of consumption for four of these products: bananas, tea, coffee, and cocoa. Spices, tomatoes, and fruit juice also have import shares surpassing 60 percent. Meanwhile, consumption of beef and oranges have not been as reliant on imports, with a dependency totaling less than 20 percent of U.S. consumption. In 2024, the beef industry produced 12.4 million metric tons (MMT) of carcass weight equivalent beef, and the citrus industry grew 3.33 MMT of oranges. Of the 1.52 MMT of beef imports in 2024, ground beef made up nearly two-thirds at 981 thousand metric tons (TMT).

Figure 1: U.S. Import Share of Agricultural Products Relieved of Reciprocal Tariffs, MT, Five-Year Average 2020-2024

	Import Share	Production	Imports
Beef*	12.68%	12,472,000	1,810,400
Oranges	17.11%	3,332,304	687,805
Fertilizer	23.84%	39,150	12,257
Spices	60.00%	427,003	640,505
Tomatoes	69.93%	864,162	1,981,046
Fruit Juice**	69.77%	2,097415	4,840,255
Cocoa	99.00%	14,240	1,409,748
Coffee	99.82%	2,736	1,502,760
Tea	99.99%	29	205,456
Bananas	100.00%	–	5,121,292

Canada is the largest source of imported cocoa products and fertilizer for the United States, amounting to $2.77 billion and $4.73 billion, respectively, in 2024. Brazil is the leader in fruit juice exports to the United States at $1.14 billion. Mexico is the source of 85 percent of imported tomatoes, worth $3.12 billion, in the United States. Vietnam and India rank as the two leading sources of U.S. spice imports, $472 million and $410 million, respectively. As for tea, China ($118 million), Japan ($115 million), Canada ($107 million), and India ($92 million) each account for around 10 percent of U.S. imports. Brazilian coffee exports totaled $2.13 billion, and 21.6 percent of U.S. imports.

Additionally, the Trump administration has announced framework agreements with Ecuador, Guatemala, El Salvador, and Argentina, focusing on reciprocal trade and investment to boost market access and address non-tariff barriers. These agreements would remove the reciprocal tariff rate of 10 percent, 15 percent in the case of Ecuador, on the bulk of exported products to the United States from the respective country. In 2024, U.S. imports of agricultural products totaled $7.45 billion from the four countries. In 2024, imports from Ecuador totaled $3.78 billion with shellfish accounting for 35 percent of this total, with cut flowers, bananas, and cocoa each worth more than ten percent of the import value. Two products, bananas and coffee, made up more than half of the $2.9 billion imported from Guatemala. The $2.40 billion of imports from Argentina were mixed between a large group of items, with shellfish, beef, wine, and sugar making up 41 percent of the total. Finally, sugar and coffee were the leading products imported from El Salvador, together totaling $207 million of the $415 million in 2024.

Figure 2: U.S. Imports from Selected Countries, 2024

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Sources:

Buzzanell, Peter J. Rex Dull, & Fred Gray. “The Spice Market in the United States: Recent Developments and Prospects.” July 3, 1995. https://ers.usda.gov/publications/pub-details?pubid=42049.

Economic Research Service (ERS). “Fruit and Tree Nuts Yearbook Tables.” Accessed November 2025. https://www.ers.usda.gov/data-products/fruit-and-tree-nuts- data/fruit-and-tree-nuts-yearbook-tables/. Published February 25, 2025.

Foreign Agricultural Service (FAS). “Global Fertilizer Dashboard.” Online Database. https://www.fas.usda.gov/data/visualization-global-fertilizer-trade-dashboard. Online public database.

Foreign Agricultural Service (FAS). Global Agricultural Trade System (GATS). Online database. https://apps.fas.usda.gov/gats/default.aspx. Online public database accessed November 2025.

Foreign Agricultural Services (FAS). Production Supply and Distribution (PS&D). Online Database. https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery. Online public database

The White House. “Fact Sheet: Following Trade Deal Announcements, President Donald J Trump Modifies the Scope of the Reciprocal Tariffs with Respect to Certain Agricultural Products.” November 14, 2025.

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Ribera, Luis, and Landyn K. Young. “Recent Tariff Exceptions and Trade Agreements Aimed to Reduce Food Costs.” Southern Ag Today 5(49.4). December 4, 2025. Permalink

In 2025, grain sorghum production for the United States totaled 10.2 million metric tons (MMT). This was led by Kansas, totaling 5.8 MMT, and Texas, 2.64 MMT. Colorado (497 thousand metric tons), Nebraska (494 TMT), and Oklahoma (479 TMT). Aside from a poor production year in 2022, the United States has averaged 9.35 MMT annually.

The U.S. is by far the largest sorghum exporter, followed by Australia and Argentina. In 2024, the United States exported 5.24 MMT of sorghum worth $1.38 billion, with China being the leading importer. From 2020-2024, China imported more than 83 percent of U.S. exported sorghum with an FOB value ranging from $1.32-2.14 billion each year. In 2024, sorghum exports to China from the United States totaled 4.63 MMT and $1.23 billion. Annually since 2020, less than 16.4 percent of U.S. sorghum exports have gone to the rest of the world. In recent years, Ethiopia, Eritrea, Sudan, and Djibouti follow China in terms of volume imported, but none have imported more than 20 TMT since 2020.

The ongoing tariff war has caused a decrease in Chinese imports of many U.S. products, including sorghum. In the partial year through July, only 82 TMT of sorghum have been exported; in the same time period in 2024, more than 3.24 MMT of sorghum were exported. As of July 2025, exports were down 80% when compared to the previous year, with sales to China down 97%. Some of these imports are primarily being substituted by Australia and Argentina. Similarly, in 2018 and 2019, sorghum trade between China and the United States fell but rebounded with the U.S.-China “Phase One” Deal that occurred in 2020. The recent agreement between the U.S. and China could reopen the Chinese market for U.S. sorghum.

World Sorghum Exports, 2013-2024

World Sorghum Imports, 2013-2024

U.S. Sorghum Exports, 2016- July 2025

Sources

Foreign Agricultural Service (FAS). Global Agricultural Trade System (GATS). Online database. Online public database accessed November 2025.

Nguema, Abigail. “Grain and Feed Update.” Foreign Agricultural Services. September 30, 2025.

United Nations Department of Economic and Social Affairs. Comtrade. Online public database accessed November 2025.

USDA Foreign Agricultural Service (FAS). Production, Supply and Distribution Online (PS&DView). Online public database accessed November 2025.

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Over the past decade, China has gone from a minor player to the world’s largest beef importer, with purchases rising from around a $100 million in 2010 to nearly $18 billion in 2022, which is a staggering increase of over 17,000%. This surge isn’t just about spending more. The actual volume of beef purchased has grown by more than 8,000%, driven by rising incomes, urban lifestyles, and shifting diets that favor beef over traditional staples like pork. The outbreak of African Swine Fever in 2018, which devastated China’s pig population, further accelerated the shift, while government dietary guidelines have promoted beef as a healthier option. Due to rising demand and imports, coupled with lifting the import restriction on U.S. beef in 2017, China is now the third largest foreign market for U.S. beef—around $1.5 billion in 2024. This rise has been highlighted in previous Southern Ag Today articles (For example, see: https://southernagtoday.org/2025/04/17/high-tariffs-could-halt-u-s-beef-exports-to-china/).

Rising trade tensions between the U.S. and China, which started earlier this year, raised concerns for U.S. beef exporters. Chinese tariffs on American beef soared as high as 145%, making it far more expensive than beef from countries like Brazil and Australia. Although those tariffs were later lowered to around 33%, the decline had already begun. On top of that, China let export approvals expire for nearly 400 U.S. beef processing plants in March, about 60% of all facilities allowed to ship beef to China, effectively blocking a large portion of U.S. supply (Marianetti, 2025). This move, seen as a non-tariff barrier, has created uncertainty, shaking confidence in the reliability of U.S. beef exports.

In 2025, rising trade tensions quickly took a toll on American beef in China (see Figure 1). From January to September, U.S. beef exports fell sharply—from $814 million in 2024 to $442 million in 2025—a 46% drop driven mostly by lower volumes. The decline was even steeper in the second and third quarters, after China let key export approvals expire, with U.S. beef falling nearly 70%. This happened even as China’s overall beef imports grew in value. Meanwhile, Australia and Brazil gained ground: Australia’s exports to China rose 42%, and Brazil’s increased nearly 25%. In 2024, the U.S. held about 9% of China’s beef import market, compared to Brazil’s 48% and Australia’s 9%. By the third quarter of 2025, the U.S. share had dropped to less than 1%, while Brazil and Australia accounted for 59% and 13%, respectively. It’s a clear sign that when trade tensions rise, other suppliers are quick to take the lead.

References

Marianetti, J. (2025). USA Dairy Pork and Poultry Registrations Renewed while Beef Remains Overdue (GAIN Report No. CH2025- 0056). Foreign Agricultural Service, Washington, D.C.

Trade Data Monitor. (2025). https://tradedatamonitor.com/

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Muhammad, Andrew. “Recent Trade Tensions Cause U.S. Beef to Lose Ground in China, Spurs Gains for Australia and Brazil.” Southern Ag Today 5(44.4). October 30, 2025. Permalink

As U.S. trade policy under this administration continues to dominate the news, there seems to be a marked shift from multilateral to bilateral trade negotiations. The current administration’s strategy to use tariffs and the size of the U.S. economy as leverage to change trade relationships bilaterally seems to be the norm lately. There are 166 countries that are members of the World Trade Organization (WTO). How realistic would it be for the U.S. to negotiate bilateral trade agreements with each of them? And a follow up question, does the United States need to have a bilateral trade agreement with each country?

The answer to the first question is probably “no” as the average duration of U.S. trade negotiations from launch date of signing is 18 months and from launch to date of implementation is 45 months (Figure 1.). Therefore, it will take too much time and resources to negotiate or re-negotiate trade agreements with all WTO members. However, to the second question, the answer is probably “no” as well; the top 10 export destinations accounts for 76 percent of all U.S. products exported (Figure 2.). The European Union (EU) is the largest market for U.S. products accounting for 17.51 percent followed by Canada, Mexico and China with 17.07, 14.51 and 8 percent, respectively. The United States has already or is currently negotiating trade agreements with all top 10 countries.

When the top 10 destination for all U.S. products are ranked by share of agricultural exports, the order of countries changes. China is the largest destination for all U.S. ag products accounting for 17.25 percent. In addition, agricultural products account for 23.98 percent of all U.S. products that China imports from the United States. The second largest destination is Canada where 15.38 percent of all U.S. agricultural products end up, and those agricultural products account for 10.01 percent of all U.S. products exported to Canada. To finish the top three, Mexico accounts for 14.99 percent of all U.S. agricultural products exported while agricultural products account for 11.49 percent of all products the U.S. exported to Mexico. These top 10 countries account for 71 percent of all U.S. agricultural exports.  Due to the latest trade tensions, China is no longer the top destination for U.S. ag exports but is now third behind Mexico and Canada.

References

Foreign Agricultural Service (FAS). Global Agricultural Trade System (GATS). Online database. https://apps.fas.usda.gov/gats/default.aspx. Online public database accessed October 2025. 

Freund, Caroline & Christine McDaniel. “How Long Does It Take to Conclude a Trade Agreement With the US?” Peterson Institute for International Economics. July 21, 2016.

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Ribera, Luis A., Landyn Young. “Can the U.S. Move from Multilateral to Bilateral Trade Agreements?” Southern Ag Today 5(42.4). October 16, 2025. Permalink