In brief
The ongoing trade tensions spark major reactions, affecting both U.S. and Canadian markets.
In a dramatic turn of events, several Canadian provinces, led by Ontario, have removed U.S.-made alcohol from their shelves as a direct reaction to U.S. tariffs on Canadian goods. This action, described by Lawson Whiting, CEO of Brown-Forman (the company behind Jack Daniel's), as "worse than tariffs" completely cuts off sales of their products in a significant market. The Liquor Control Board of Ontario (LCBO), one of the globe’s largest alcohol buyers, has acted in response to a 25% tariff the Trump administration imposed on Canadian imports.Whiting commented on the situation stating, "That's worse than a tariff because it's literally taking your sales away." The LCBO is reportedly a good source of income, selling nearly $1 billion worth of U.S. alcohol each year, which has all been removed from shelves as of Tuesday. Despite facing this setback, Brown-Forman noted that Canada only represents about 1% of their total sales, indicating they might weather this storm.In a related move, Canadians have been encouraged by the LCBO to turn to local products, many of whom have already begun doing so in light of the tariffs. As tensions mount, Canada's Prime Minister Justin Trudeau criticized the U.S. tariffs, calling them "very dumb" and indicating that they could undermine the Canadian economy strategically. Meanwhile, the trade conflict also entails 25% tariffs on Mexico, though the auto industry has been temporarily spared.Amid all this uncertainty, Whiting hinted at observing developments in Mexico, which represents a larger sales market for Brown-Forman, making up 7% of their revenue in 2024.
