When trade soured, this American liquor maker moved to Canada

Breaking news from the markets: When trade soured, this American liquor maker moved to Canada2 hours ago Share Save Add as preferred on GoogleNadine YousifSenior Canada reporterCourtesy of Phillips Distilling CompanyMinnesota-based Phillips Distilling Company says its Sour Puss liquor is uniquely popular in Canada, forcing it to shift production north of the border. Stephanie Intrevado has a bit of a collection. Ever since taking her first sip of Sour Puss at the age of 18 - the legal drinking age in her home province of Quebec - she has been on the hunt to try every flavour of the brightly coloured, fruity liqueurs.

From passionfruit, to coconut and watermelon, the 35-year-old counts herself "very lucky" to have acquired some hard-to-find bottles and merch. So when she learned that Sour Puss, a popular drink with Canadian university students, was actually American-made, she was shocked - and concerned about where she would get her next bottle. Most Canadian provinces have been boycotting American-made liquor since Spring 2025, as retaliation for US President Donald Trump's tariffs against the country.

Economic Details

The boycott put Phillips Distilling, the family-owned maker of Sour Puss based in Minnesota, into a tight spot. They lost 70% of their Canadian business as a result, which CEO Andy England referred to as "a disaster". Sales of Sour Puss were the hardest hit, as Canada is by far its largest consumer.

It forced Phillips Distilling to do something they have never done before: move some production north of the border. The shift worked, with their products back on sale in stores across Canada. "We're in a different place now," England told the .

"We produce and sell in Canada," he said. "We have, I think, convinced all of the provinces to take back some of our products, and we're on the road to recovery. "Canada's US booze boycott could be resolved if Trump addresses tariffs, Carney saysHere's what Canadian provinces are doing with all the US liquor they pulled off shelvesUS-based liquor producers have all taken a financial hit since the trade war between the two countries heated up.

Analyst Views

But Phillips Distilling is one of the only ones yet to shift some production to Canada. A trade deal between the two countries remains elusive, still. The US has flagged the liquor sales ban as a main irritant amid ongoing negotiations, while Prime Minister Mark Carney has said that provinces may be willing to sell American alcohol again if tariffs on key Canadian sectors like automotives, metals and lumber are lowered or lifted.

Provinces first made the decision to ban the sale of US liquor in March of last year, starting with Ontario, whose liquor board is one of largest wholesale purchasers of alcohol in the world, and whose automotive sector has been hard hit by Trump's tariffs. Other major provinces soon followed, including Quebec and British Columbia. As of May 2026, only two provinces out of 10 are still selling American alcohol: Alberta and Saskatchewan.

Economists are analysing what the news means for the markets.