Canada targets American alcohol

While my vineyard sleeps, American wine becomes collateral damage in a trade war.

Yesterday at the farm. Five inches of snow, a big deal for us.

Canada's first targets for retaliation are the ones easiest to manage and easiest to see are coming from the USA. Alcohol, including both wine and distilled spirits, are sold in provincial liquor stores with clear labels showing their origins.

Immediately after Donald Trump's announcement of the 25 percent tariff, Canada's provincial governors announced they were pulling U.S. alcohol off the shelf and banning new sales.

Their intent was to focus attention on red states. Producers in those areas might bring pressure on Trump and MAGA representatives in Congress. This might be bad politically for MAGA politicians. It is an easy win for Canadian ones. They can wave their flag. Doug Ford, Premier of Ontario, said "There's never been a better time to choose an amazing Ontario-made or Canadian-made product."

Wine is caught in the crossfire. Kentucky, politically bright red, is the top-of-mind state for producing bourbons. lt is a $9 billion industry there, producing 23,000 jobs. But alcohol is a wide target. Bright blue California is America's largest producer of wine, producing about 82 percent of U.S. wine. Wine is a $55 billion industry in California, far eclipsing Kentucky's bourbon. The state of blue Washington is the number two state. New York and Oregon, both blue, are tied for number three. Wine states are collateral damage.

The provinces are banning new wholesale purchases, not destroying existing stocks. As of yesterday, liquor stores in Toronto had stocked shelves.

Photo by Canadian Sandford Borins, author of Sunday's guest post

Any grape sales that might come off my vineyard this fall are a miniscule bargaining chip and probably wholly irrelevant to the tariff war. I suspect Trump's tariff announcement has little to do with trade balances (which are nearly even with Canada, where wage costs are roughly similar to ours), or fentanyl (of which little comes through Canada), or illegal migration (of which Canada is a small portal.) The Canadian tariff is about political posturing and branding. Trump is showing he is the 600-pound gorilla in this forest, the big guy. He is showing Americans that he restores American greatness, because all he needs to do is beat on his chest and other creatures tremble and capitulate. Trump wins and America wins.

Possibly Trump is serious about using tariffs as a revenue source and a way to bring jobs back to America. Perhaps he wants a permanent 25% tariff. That is possible. He is selling it. He is telling Americans there will be pain, but it will be worth it. 

Or maybe the real end-game for Trump is credit for another burst of American expansion, doubling the size of the country on a map, especially one with a Mercator projection. Asked what he hoped Canada would do, Trump said, “What I’d like to see— Canada become our 51st state.” 

We don’t need them. As a state, it’s different. As a state it’s much different. And there are no tariffs. So I’d love to see that. Some people say that would be a long shot. If people wanted to play the game right, it would be 100 percent certain that they’d become a state. But a lot of people don’t like to play the game. Because they don’t have a threshold of pain.

He isn't seeking to seduce Canada. He is looking for a capitulation from it. Join us, or your miserable life will get even worse. Canadians read it as an insult, which is most certainly is. The current mood by Canada is to fight back, targeting anything with a label showing an American terroir. 

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