Trade disputes between the US and Canada are having a dramatic economic impact on the North American alcoholic beverages industry, as well as the glass producers supplying the industry with packaging.
One of the most visible signs is the collapse of US spirits in the Canadian market. Beginning in March 2025, in response to US tariffs in early 2025, most Canadian provinces restricted the retailing of US alcohol.
Since that time, US spirits exports to Canada have fallen more than 70%, according to figures from the Distilled Spirits Council of the United States (DISCUS) quoted by the Glass Packaging Institute (GPI). The value of US alcohol exported to Canada fell by an estimated $581 million, or around 81% in the 12 months following the Canadian provinces’ actions, claims the White House.
Section 338 tariffs and retaliations reach alcohol and glass packaging
More recently, US President Trump retaliated against the Canadian provinces’ actions by imposing an additional ad valorem duty of 50% on Canadian alcoholic products including beer, wine, cider, and spirits, levying Section 338 tariffs in a proclamation on July 20, 2026.
On the same day but in a different proclamation, the President included glass bottles, jars, and other packaging in a long list of diverse goods subject to 50% Section 338 tariffs, supposedly to offset Canadian tariffs against US motor vehicles. Both sets of new Section 338 tariffs (as well as a third set on dairy products) took effect in August 2026.
GPI has said the new Section 338 tariffs will place pressure on glass packaging supply chains which have traditionally spanned the border, citing US Commerce Department and US International Trade Commission data showing the nation imported 348 million glass bottles and jars from Canada in 2025, valued at more than $86 million. In particular, it is concerned that brands that cannot afford the tariffed containers will shift their glass sourcing to Asian imports, noting that glass wine and spirits bottles from China were already surging in Q2 of this year.
For its part, Canada went on to impose its own retaliatory tariffs on US goods on September 8, 2026; mirroring the actions of its neighbors, this included a 50% tariff on glass bottles, jars, and other containers. The US then responded by banning certain categories of imported Canadian alcohol entirely, a move which industry association Spirits Canada says threatens 50% of demand for its nearly CAD 2 billion industry.
Written by Shannon Behary
