What Will a Global Trade Meltdown Mean For Bourbon’s Protected Status?

No matter where you are in the world, if you ask for bourbon, you’re going to get a whiskey produced in the United States under specific rules. Bourbon is guaranteed to be bourbon, made only in America, regardless of how far afield it’s poured.

Within the U.S., domestic regulations ensure that bourbon meets its required standards. Abroad, these rules have no teeth. But via trade agreements, many other countries recognize and protect bourbon as a distinct American product, made the way we say it must be — just as the United States has committed to protections for geographically defined spirits like Scotch and tequila. Such arrangements have worked well for decades to ensure mutually acceptable terms under which distilleries can ship their spirits to other markets and trust that they won’t have to compete with imposters. Up until recently, those protections had been taken for granted.

The past year, however, has seen international trade thrown into chaos, as the Trump administration has imposed tariff after sweeping tariff while ignoring the terms of existing trade agreements. Although the Supreme Court ruled on Feb. 20 against the president’s use of the International Emergency Economic Powers Act of 1977 to impose tariffs, Trump quickly announced a new 10 percent global tariff through a provision of the Trade Act of 1974, which he plans to raise to 15 percent.

Under that law, the current tariffs can remain in place for 150 days unless extended by Congress. Their long-term viability remains to be seen, but one thing is clear: Existing trade agreements have been thrown into disarray. Trading partners have no idea what conditions they’ll be working under from day to day, and businesses are left to grapple with the potential outcomes of any number of scenarios. What used to be a settled matter is no longer guaranteed.

In such a volatile climate, could bourbon’s protected position be at risk?

How Trade Law Works

After agreeing to a trade deal, individual countries codify the agreement in domestic law, including different means of changing or repealing it in the future. These agreements typically include a section that outlines which imported products, like geographically restricted spirits, will be protected in the local market. Ashley Hanke, partner at Malkin Law Firm, notes that trademark registrations and unfair competition laws can provide similar protections even if the agreement ends. And, she adds, tariffs by themselves do not terminate trade agreements, as withdrawal requires specific legal steps that can’t be nullified by presidential fiat.

“That said, tariffs can undermine the practical value of an agreement without technically terminating it,” Hanke says, explaining that the unpredictability wrought by tariffs can interfere with years’ worth of planning and production by spirits businesses. “While the agreements themselves are legally durable, the business confidence supporting them is more fragile. In the alcohol beverage sector, we’ve seen that dynamic play out by way of U.S. tariffs prompting retaliation on American whiskey exports, even when the underlying trade agreement remains legally in force.”

Nowhere is this more evident than in Canada, where people have by and large stopped buying American whiskey and sales have plummeted. There’s potential for things to get even worse: The country’s trade agreement with the U.S. was codified into domestic law called the Spirit Drinks Trade Act, which includes a schedule of how drink names like bourbon can be used. That schedule, says author and Canadian whisky expert Davin de Kergommeaux, is easy to modify.

“It’s a difficulty that people are trying to work around. Distillers really want to make sure that they are not going to risk their distilling license or get fined.”

“It can be changed by an order in council,” he explains. “The minister can just simply send a note to the governor general … and say please do this. She could simply delete the line [about] bourbon and we would no longer be required to ensure that it was made in the States.” While the Spirit Drinks Trade Act remains in place for now, if negotiations with the United States don’t go well, de Kergommeaux notes, “You can be certain that there are distillers in Canada who would request that it be changed, and that would be a very short process.”

Case Study: European Rye Whisky

A situation unfolding in Europe offers a case study on what can happen when a spirit’s identity is threatened by trade snafus. In 2025, a long-forgotten section of an agreement between the European Union and Canada surfaced, declaring that only Canadian whisky could be sold as “rye whisky” within the partner countries. When the agreement was signed in 2004, there was a single distillery in the EU making rye. In the 20 years since, however, dozens of producers have started up and created a thriving craft rye whisky industry.

Notifications from their governments to cease using the term “rye whisky” sent distillers in Finland, Denmark, Germany, and elsewhere into a panic. Each country has its own set of laws to enforce the arrangement, with various consequences, up to canceling distilling licenses, according to writer Heather Storgaard, who has reported extensively on the issue. Faced with such a dire situation, many distillers have changed their labels and marketing as they scramble to figure out a viable path forward.

“It’s a difficulty that people are trying to work around,” Storgaard says, noting that in many cases, there has been uncertainty about exactly how to comply. “Distillers really want to make sure that they are not going to risk their distilling license or get fined.”

“Right now on one of our shelves where there’d normally be 20 different bourbons there’s just two sitting on it. And when they’re gone, they’re gone. The shelf will just stay empty.”

The situation threatens to crush an industry that is young but thriving. For bourbon, a much more established category, loss of protected status — or even calling it into question — wouldn’t necessarily mean the same existential risk. But if bourbon lost its protected status, sales would likely take a hit, as would its reputation. Without guarantees of provenance and production, consumers might no longer feel they could trust a whiskey labeled “bourbon.”

The Damage Is Done

To be clear, this is all speculation. Industry experts consulted for this article largely agree that bourbon is unlikely to lose its protected status, or its strong reputation, even if the administration continues to upend the trading environment.

“In the alcohol sector, brand equity is powerful,” Hanke says. “Products like bourbon and Scotch command value precisely because of authenticity, legitimacy, and origin. Even in a weakened trade environment, market forces and consumer expectations often discourage counterfeiting, misuse, and misrepresentation.”

That doesn’t mean bourbon won’t suffer, however. Just look at what’s happening in Canada. Following Trump’s threats in February 2025 to make the country “the 51st state,” provincial liquor authorities nationwide pulled American spirits off the shelf. In most of Canada, bourbon is no longer available and consumers have shifted to drinking local whiskies.

The Emmet Ray, a bourbon-focused bar in Toronto, has been selling through its considerable stockpile since Ontario stopped allowing American spirits just over a year ago. American whiskey offerings have decreased by at least two-thirds, according to owner Andrew Kaiser. “Right now on one of our shelves where there’d normally be 20 different bourbons there’s just two sitting on it,” he says. “And when they’re gone, they’re gone. The shelf will just stay empty.” With dwindling bourbon options, the Emmet Ray’s customers are switching to alternative whiskies from Scotland, Japan, and their own backyard.

In fact, several Canadian distillers are capitalizing on bourbon’s absence with explicitly bourbon-esque whiskies of their own, like Okanagan Spirits’ BRBN. De Kergommeaux says that the flavor profiles aren’t an exact match to the American whiskey but “some of these are pretty good substitutes.” He notes that consumers are now talking about Canadian whisky the way they once talked about bourbon, and predicts that when bourbon returns, some of the change will be permanent. “This is going to have a prolonged effect on the sales of bourbon in Canada,” he adds.

Andrea Fujarczuk, a professor of distilling at Niagara College who is currently researching brand value in spirits, agrees. “Damage has already been done,” she says. “Bourbon has turned into a political tool. Individuals now look at buying bourbon as supporting a political party and that connection has become volatile for everybody.”

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