Quick Take
Wineries throughout the U.S. were thrown into turmoil this week when Canada announced it would halt all imports of American alcohol, effective immediately. The boycott was later paused, but has left some wineries in Santa Cruz County unclear about when – and if – their exports, representing tens of thousands of dollars, will be accepted by the Canadian government, and what long-term effects Donald Trump’s tariff policies might have on American goods.
On Monday, Alex Krause, a winemaker in Santa Cruz, received an email notifying him that the government of Quebec, Canada, is boycotting American wine and alcohol.
The move was made in response to President Donald Trump’s executive order imposing new tariffs on Canadian goods, despite an agreement later that day between Trump and Canadian Prime Minister Justin Trudeau that postponed the order for 30 days. According to the email, the Société des alcools du Québec (SAQ), a government-run monopoly that controls the trade of alcoholic beverages within the province, would remove all American products from grocery store shelves and restaurants, and cancel future orders.
The Liquor Control Board of Ontario followed suit and similarly declared it would strip its shelves of American products, representing nearly $1 billion in annual sales, with products from 35 states.
Later on Tuesday, Trudeau and Trump agreed to a 30-day pause on the tariffs. The agreement cooled a simmering trade war but has left wineries in Santa Cruz County and beyond with little information regarding the status of their exports.
“It’s a total nightmare,” said Krause, the co-owner of Birichino winery in Santa Cruz. He was preparing to ship $20,000 of carignane, a red wine, and malvasia bianca, a white varietal, to Quebec when he received the email. “I was literally heading down to the winery to put stickers on the bottles to make the labels compliant.”
The wine had already been processed and approved by the government, but its future is now in limbo. So far, the orders haven’t been canceled, but Krause has stopped preparing them for shipment to save on materials and labor costs.
“Maybe it was a false alarm, but it was alarming nonetheless. A half to a third of our business is exports,” said Krause. “Even if we survive and deals are made with Canada and Mexico, Trump has said that Europe is next, and that’s by far our biggest export market.”
Cole Thomas, winemaker and co-owner of Madson Wines in Santa Cruz, was expecting his Canadian importer to place an order when he received the email from the SAQ earlier this week. Madson ships around $10,000 to $15,000 of wine a year to Quebec and Ontario, some of which has already been sent out and is being distributed by the importer.
After receiving the notice, all of Madson’s Canadian orders are on indefinite hold, and it’s unclear what will happen to Thomas’ wine.
“It’s significant. All of our markets are equally important, maybe not from a revenue standpoint, but from a standpoint of having our wines out in the world,” said Thomas, who travels to Canada once a year to strengthen and make new connections with importers and restaurants. “It’s not easy to get on a list or have a presence in a market, and now that time spent seems less worthwhile.”
Like Krause, he’s waiting to see what will happen at the end of the 30-day agreement, and making plans to sell his wine domestically if necessary.
Tariffs could have broader effects on the costs of materials, too.
“We get our bottles from Mexico, and cork could become more expensive – a lot of it comes from Europe,” Thomas said.
Even if an agreement is made and this threat turns out to be bluster, Krause is worried about the long-term effects Trump’s foreign policies will have on American products.
“Even if the orders do go through, I’m very concerned about the negative perception of American products around the world,” he said. “They’re not going to want to buy American anything because it could be seen as supporting the actions of this government.”
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