A prolonged period of rampant inflation is forcing consumers to adjust their approach to spending money.
In February 2025, consumers cut their spending by the largest monthly percentage in four years. And with President Trump recently confirming that he won’t rule out a near-term recession, consumers may be increasingly scared to spend as freely as they normally would.
Complicating matters is the introduction of tariffs — something President Donald Trump talked up before taking office.
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The Washington Post recently surveyed Americans to gauge their thoughts on how the president is handling the economy, and 55% said they disapprove of his general policies, while 60% are opposed to tariffs.
Not shockingly, the majority of Americans are either somewhat or very concerned about tariffs leading to higher costs.
Liquor brand issues tariff warning.
Liquor sales have been hurting
Even before tariffs came into play, Americans were skittish on spending due to lingering inflation — so much so that in 2024, liquor sales posted a rare year-over-year decline.
The Distilled Spirits Council of the United States reported that U.S. liquor sales fell 1.1% in 2024, largely due to weak sales in the super premium category.
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Between December 2023 and December 2024, food prices rose 2.5% broadly, while shelter costs increased 4.6%. Consumers have had to prioritize these essential expenses over high-end food and drink items.
But part of 2024’s overall decline in liquor sales could be attributable to changing habits. Consumers may be growing increasingly conscious about the potential dangers of alcohol.
In early 2025, the U.S. surgeon general issued a warning linking the consumption of alcohol to an elevated risk of cancer. There’s a push for alcoholic beverages to carry warnings about the health risks involved — a change the tobacco industry is more than familiar with.
Jack Daniel’s owner raises big concerns over tariffs
At a time when liquor sales are already sluggish, the industry has yet another challenge to contend with.
Lawson Whiting, CEO of Jack Daniel’s maker Brown-Forman, expressed concerns during the company’s most recent earnings call following the decision by Canadian retailers to pull U.S. alcohol from shelves.
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“That’s worse than a tariff because it’s literally taking your sales away completely, removing our products on the shelves,” Whiting told investors. “That’s a very disproportionate response to a 25% tariff.”
Although Canada only comprises about 1% of Brown-Forman’s sales, the company is more worried about the broader impact. And the fear is that tariffs could result in a similar response from the European Union. An estimated 55% of Brown-Forman’s liquor sales come from outside the U.S.
But the concern goes beyond liquor. Analysts have said that Canada’s early response to tariffs could be just the tip of the iceberg. If foreign nations extend their boycotts to a wider range of products, it could be catastrophic for countless well-known U.S. brands.
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Since implementing tariffs, President Trump has conceded to a delay through April 2. But there’s a catch.
To avoid tariffs through early April, goods coming from Mexico and Canada have to comply with the USMCA free trade treaty that Trump signed during his first term. But with only about 50% of goods from Mexico and 38% from Canada being in compliance, that short-term olive branch may not do much to stop the bleeding.
Meanwhile, Canadian consumers have taken to social media to post videos and photos of empty-shelved liquor stores where U.S. products were once sold.
The Liquor Control Board of Ontario put out a statement in response to Trump’s tariffs showing just how broad the ban is. “Spirits, wine, cider, beer, ready-to-drink coolers/cocktails, and non-alcoholic products produced in the U.S. will no longer be available in our retail stores or LCBO Convenience Outlets,” it said.
The liquor industry isn’t the only one being battered by recent tariff policies. Stocks have taken a dive as a result of widespread economic concerns, and the situation could get much worse before it gets better.
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