Now that it’s official that the U.S.-Mexico-Canada Agreement will not be renewed for now, the American wine industry is taking what the Wine Institute’s Charles Jefferson calls an “all-of-the-above approach” to regain access to Canadian markets.
While industry leaders continue to urge both governments to get to the negotiating table, they’ve also embraced legislation introduced July 6 by Rep. Claudia Tenney, R-N.Y., that could lead to increased tariffs on Canadian goods if provincial restrictions against American alcoholic beverages aren’t lifted.
“I think the challenge for us is we’re collateral damage in this dispute,” said Jefferson, the Wine Institute’s vice president of federal and international public policy, referring to the U.S. steel and aluminum tariffs that prompted Canada’s retaliatory bans.
“The underlying issues have nothing to do with wine or alcohol,” Jefferson told Agri-Pulse. “That’s not an uncommon position for wine to be in, unfortunately. As a highly valued agricultural commodity, we often end up a target. But we’re engaged with our own government, with provincial governments and the Canadian government, and we urge everyone to resolve these issues.”
The efforts come after U.S. wine exports to Canada plunged 78% in 2025, wiping out $357 million in export value and turning a $254 million U.S. wine trade surplus in 2024 into a $90 million deficit a year later, according to Wine Institute data. More than 80% of the losses stem from the Canada bans, the institute estimates.
Trade relations were thrown into further flux when the Trump administration on July 1 declined to renew the USMCA for another 16 years, triggering a decade of annual reviews. Trump has said he prefers bilateral trade agreements, and the U.S. and Mexico are set to hold talks next week.
“There will be a yearly renewal process now, which just creates more and more uncertainty as long as this administration is in place,” WineAmerica vice president Michael Kaiser told Agri-Pulse. “It’s just another stop on the roller-coaster that is this administration’s trade policy.”
To prod Canada into relenting, WineAmerica, Wine Institute and American Craft Spirits Association are backing Tenney’s legislation, the Combating Attacks on our National Alcoholic Drinks by Allies (CANADA) Act, which would direct U.S. Trade Representative Jamieson Greer to begin an investigation of the provinces’ actions under Section 301 of the Trade Act of 1974.
Section 301 authorizes the U.S. to impose trade sanctions on foreign countries that engage in discriminatory practices that burden or restrict American commerce. Greer has told lawmakers that enforcement actions against Canada may be necessary to resolve the dispute.
“No one wants more tariffs, but after a year and a half, we want to get our products back on Canadian shelves,” Kaiser said in an email.
Meanwhile, California producers are responding to the loss of market access by lobbying for trade and financial relief, downsizing operations and redoubling efforts to build domestic demand. For instance, Sonoma County Winegrowers has “made a conscious decision to double down on marketing” by expanding partnerships in sports, hospitality and other “nontraditional channels” to drive sales, CEO Karissa Kruse said.
SCW and Sonoma County Vintners on July 1 announced they will align their winery membership programs and plan an ambitious national marketing and partnership campaign beginning in 2027.
“The disruption of the Canadian market is certainly concerning and comes at an already challenging time for the industry,” Kruse said in an email. “The impact varies by winery depending on their export business, but Canada has long been an important market for California wine.”
For his part, the Wine Institute’s Jefferson remains optimistic that the stalemate with Canada over alcohol access can be broken.
“We have many, many family wineries that have invested for decades in the Canadian market building relationships with Canadian consumers,” he said. “I think there are some challenging trade issues between the U.S. and Canada, but I think everyone understands that trade relationship is too important to let it suffer indefinitely. There is going to come a time when we sit down and address these issues.”
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