When Caledonia Spirits, a Vermont-based distillery known for its Barr Hill Gin, spent four months preparing an order for shipment to Quebec, the company expected their bottles to reach customers across the border.
Instead, after President Donald Trump announced tariffs on Canada in early February, the order was abruptly canceled.
This decision is leaving the business with potentially unsellable inventory and an uncertain future in the Canadian market, even after the Trump Administration announced a 90-day pause on many non-China tariffs.
The company creates bottles and labels to meet Canadian regulations, meaning they can’t easily repurpose the spirits in other markets.
The situation is not unique to Caledonia Spirits. Vermont’s Secretary of Commerce, Lindsay Kurrle, described the issue as a major disruption for small businesses exporting to Canada. “Vermont producers who have prepared alcohol to be sold in Canada are left with this alcohol that can’t just be sold here,” Kurrle said at a press conference. “It’s not an easy fix. It costs money. It takes investments.”’
As small businesses across Vermont and the U.S. deal with the financial consequences of shifting trade policies, understanding the impact of tariffs and preparing for sudden changes is proving critical.
Governor Phil Scott acknowledged the challenges, stating that these tariffs are straining relationships between Vermont producers and Canadian retailers.
“It’s creating this divide, and they’re taking your product off their shelves because they don’t want it there anymore,” Scott said. “It’s unfortunate. These are our friends.”
When businesses depend on exports, tariffs can shut down vital revenue streams. Finding alternative buyers in a short timeframe isn’t always feasible, especially when products are customized for foreign markets.
Businesses that are able to export their goods or rely on imports are often left with two choices: absorb the cost of tariffs and take a financial hit or pass those costs onto their customers through increased prices, which can make them less competitive. Neither option is ideal.
