Canada May Need to End US Alcohol Ban, Trade Advisor Says

Canadian Minister of Transport Lisa Raitt, with U.S. Transportation Secretary Anthony Foxx, speaks during a news conference at the Transportation Department in Washington, Friday, May 1, 2015, to announce the next generation of stronger, safer rail tank cars for the transportation of flammable liquids in North America. (AP Photo/Manuel Balce Ceneta)

Canada’s decision to remove American alcohol from liquor store shelves could be coming to an end as the country looks to avoid a new round of 50% U.S. tariffs on Canadian goods.

Lisa Raitt, a former Canadian politician and member of the Advisory Committee on Canada-U.S. Economic Relations, said reversing provincial bans on U.S. alcohol could be an important part of reaching a last-minute trade agreement with the United States.

“[Asking] the premiers to reverse their booze bans, I do believe, is an important part of the entire deal,” Raitt told BNN Bloomberg.

Her comments come as Prime Minister Mark Carney has asked Canadian premiers to put American alcohol back on store shelves as Canadian and U.S. officials work to finalize a trade agreement and avert the looming tariffs.

U.S. President Donald Trump has repeatedly pointed to Canada’s restrictions on American alcohol as discriminatory toward U.S. businesses. The dispute has become particularly important as the Trump administration threatens to impose 50% tariffs on certain Canadian products.

Raitt said the alcohol bans, which were introduced in retaliation for Trump’s earlier tariffs on Canadian steel and aluminum, may have served their purpose.

“The reality is that the leverage on this negotiation going around really did come from the U.S.,” she said.

The provincial bans began in March 2025 after Trump imposed 25% tariffs on Canadian goods. Liquor boards in provinces across Canada subsequently removed American spirits, beer and wine from their shelves.

The move has had a significant impact on U.S. beverage alcohol producers. The United States had long been one of Canada’s largest sources of imported alcohol, while Canada was a major export market for American wineries, distillers and brewers.

The potential return of American alcohol comes after months of debate over whether Canada should maintain the restrictions as a bargaining tool.

Some Canadian producers have argued that keeping U.S. products off shelves has given domestic wineries, breweries and distilleries an opportunity to win over consumers who previously bought American products.

But others have suggested that ending the restrictions could help reduce tensions between the two countries and protect Canadian industries from much steeper tariffs.

The possibility of lifting the bans has also drawn criticism from Canadian politicians who argue that Canada should not give up a retaliatory measure without securing meaningful concessions from the United States.

Raitt, however, said reaching an agreement is preferable to allowing the threatened tariffs to take effect.

“You’re better to have an agreement, than not have an agreement,” she said.

The proposed tariffs would come on top of an already complicated trade relationship between the two countries. Canada sends the vast majority of its goods exports to the United States, making the prospect of another major escalation particularly concerning for Canadian businesses.

For American alcohol producers, meanwhile, the potential return to Canadian liquor store shelves would reopen a market that has been largely inaccessible for more than a year.

The Distilled Spirits Council of the United States said earlier this week that American spirits exports to Canada have fallen by more than 70% since the provincial bans were introduced.

The group has urged the Trump administration and Canadian officials to reach a negotiated solution that restores access for American spirits across Canada while returning the two countries to a zero-for-zero tariff framework.

Raitt said the immediate priority should be economic stability, arguing that businesses need certainty even if the political relationship between the two countries remains volatile.

“I do believe that it’s the industry and the sectors that will make sure that both sides keep their bargain, and that the flow of goods will continue across the border, and investment will continue across the border,” she said.