LEXINGTON, Ky. — The trade war is intensifying. In response to tariffs announced by President Donald Trump, the Liquor Control Board of Ontario is restricting all U.S. beverage alcohol sales and related imports.

What You Need To Know

  • The trade war between U.S. and Canada could affect Kentucky’s bourbon industry

  • Some bourbon industry leaders said retaliatory tariffs could hinder industry growth

  • Barrel House Distilling Company in Lexington plans to expand despite tariffs

  • Part of the distillery’s plan includes only making enough bourbon to sell in the commonwealth

Following the latest tariff surge between the U.S. and allied countries, Kentucky’s bourbon industry could face changes for mass producers and consumers. 

In social post on X, president of the Kentucky Distiller’s Association, Eric Gregory, addressed the tariffs and the effect on Kentucky bourbon. He called bourbon a “great American success story.”

The move from Canada did not surprise U.S. Rep. Morgan McGarvey, D-Louisville. 

“We’ve seen this play out before when Trump was president. We know these countries are going to impose retaliatory tariffs on us. That’s going to happen. The bourbon industry is a $9 billion signature industry in Kentucky. Meanwhile, the costs and price of our goods and our groceries continue to skyrocket,” McGarvey said.

McGarvey said in a post on X, U.S. tariffs could cost Kentuckians on average $1,200.  

According to The Distilled Spirits Council, in 2024, Canada was the second largest export market for American spirits and exports totaled $221 million. Also last year, the U.S. imported $622 million worth of Canadian spirits. 

Lexington Crafters and Barrel House Distilling Company said they are not worried about the tariffs.

Barrel House is the first business to revive the Manchester distillery and now the entertainment district, with its tavern, gift shop, crafting and touring facility. Brand ambassador James Gerard said it’s also the place for award-winning bourbon. 

The company plans to expand soon, branching out from Lexington to Cynthiana. 

“We’re actually booming and growing right now. So we are seeing a need for production. The new facility will allow us to be able to uptick our production by about tenfold,” Gerard said.  

Part of their plan includes only making enough bourbon to sell in the commonwealth, meaning every bottle filled and labeled will be made and sold in the state using only Kentucky-sourced resources. 

“So many brands like to spread out and try to see if they can get into all 50 states and their product is kind of trickled out there. We believe in the opposite. Currently, we believe it’s better to have people drive from other states and come down and get good Kentucky Bourbon,” said Gerard. 

Rep. Andy Barr, R-Lexington, is looking forward to new opportunities.

He said in a statement, “For too long, one-sided trade deals put Kentucky industries at a disadvantage. Kentucky’s signature bourbon industry is a critical driver of our economy, and I know President Trump understands how important it is to protect it — and every other American-made product facing — unfair treatment abroad. We’ve already seen progress. Thanks to President Trump’s leadership, India cut its tariff on American bourbon from 150% to 100% — a big step forward that opens up new opportunities for Kentucky distillers.”   

The Dow fell by almost 700 points after the new tariffs by President Trump went into effect. It has gone down more than 1,300 points in the past two days.

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