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OTTAWA — Mark Carney’s victory in the Liberal leadership race puts the final nail in the coffin of Ottawa’s controversial plan to hike the inclusion rate on capital gains.

When they tabled their budget last spring, the federal Liberals presented the plan to change capital gains as a way to get wealthy Canadians and corporations to pay more — but the plan has faced a series of delays ever since.

Tax expert Jamie Golombek of CIBC says the capital gains changes are still causing “confusion” during this tax season, even though the higher inclusion rate won’t be in play.

Carney confirmed in his victory speech on Sunday that he would kill the planned capital gains hike.

The new rules would have seen Canadians pay more tax on capital gains earned over $250,000 in a year, while businesses would have paid the higher amount on all capital gains.

Tech leaders argue the capital gains hike discouraged entrepreneurs from taking risks and building their businesses in Canada.

Council of Canadian Innovators CEO Benjamin Bergen says the rollback of the capital gains change is a good move, but the damage has been done to Canada’s reputation in the tech sector.

This report by The Canadian Press was first published March 11, 2025.

Craig Lord, The Canadian Press


ST. PAUL, Minn. (AP) — A special election in a Minnesota House district at the center of a post-election drama to control the chamber will decide whether control will be tied between Democrats and Republicans, or if the GOP locks in a narrow but workable majority.

The election in heavily Democratic House District 40B in the northern St. Paul suburbs of Roseville and Shoreview was scheduled after a state court ruled that Democratic state Rep.-elect Curtis Johnson failed to meet residency requirements. That disrupted an expected 67-67 tie in the House and led to the collapse of a power-sharing agreement between the two parties after Republicans decided to capitalize on their unexpected majority, prompting a three-week Democratic boycott of the chamber.

The election pits Democrat David Gottfried against Republican Paul Wikstrom, who also ran for the seat in 2024 and had challenged Johnson’s residency status in court.

The parties reached a new power-sharing agreement in February that assumed Democrats would win the special election and restore the 67-67 tie. Under the terms of the deal, Republican Lisa Demuth will remain House speaker for the next two years. If Gottfried wins, the two parties will have even strength on most committees, except for an oversight committee that Republicans will control to investigate fraud in government programs.

Democrats hold a one-seat majority in the Minnesota Senate. Given the tie in the House, where 68 votes are needed to pass most bills, some degree of bipartisan cooperation will be required to pass the big budget measures during the 2025 session and get them to Democratic Gov. Tim Walz for his signature. Updated budget projections released last Thursday suggested difficult negotiations ahead. The projected surplus for the next two-year budget slipped to $456 million, while the projected deficit for the two years after that grew to $6 billion.

As indicators of Democratic strength in the district, the ineligible Johnson received 65% of the vote in November, compared to about 35% for Wikstrom. Democratic presidential nominee Kamala Harris carried the district with 68% of the vote, far better than the 51% she received statewide in her national loss to President Donald Trump, the Republican nominee.

While Democrats had the “trifecta” of control over both chambers and the governor’s office in 2023 and 2024, GOP gains in the November elections returned the state to divided government, which has been the norm for most of the past three decades.

Steve Karnowski, The Associated Press



LOS ANGELES (AP) — Former Democratic U.S. House member Katie Porter announced Tuesday that she is entering the 2026 contest for California governor, joining a crowded field of candidates that could be upended if former Vice President Kamala Harris joins the race.

Porter, who became a social media celebrity by brandishing a white board at congressional hearings while grilling CEOs, promised in a campaign launch video to be an aggressive counterweight to President Donald Trump’s administration at a time when the heavily Democratic state has clashed with the White House over issues from water management to immigrant rights.

“In Congress, I held the Trump administration’s feet to the fire when they hurt Americans. As governor, I won’t ever back down when Trump hurts Californians — whether he’s holding up disaster relief, attacking our rights or our communities, or screwing over working families to benefit himself and his cronies,” Porter said.

The contest to replace term-limited Democratic Gov. Gavin Newsom already has lured a large scrum of announced and likely candidates that would be upended if Harris decides to seek the state’s top office.

Harris, a former state attorney general and U.S. senator, has not ruled out seeking the governorship since she left Washington in January after a failed presidential bid. Porter is friendly with the former vice president and has indicated she would step aside if Harris joins the race. In 2012, Harris, then California’s attorney general, appointed Porter to be the state’s independent bank monitor in a multibillion-dollar nationwide mortgage settlement.

If Harris gets in the race “there are very few politicians who would want to take her on,” said Claremont McKenna College political scientist Jack Pitney. “She’d be likely to win the Democratic nomination and Democrats are likely to win the governorship.”

Porter, who made an unsuccessful run for U.S. Senate last year and also is known for her small-dollar fundraising prowess, becomes one of the best known candidates, joining former Los Angeles Mayor Antonio Villaraigosa and Lt. Gov. Eleni Kounalakis, among others, on the Democratic side.

Democrats are expected to easily hold the seat in a state where they outnumber registered Republicans by nearly 2-to-1. Republicans have not won a statewide election in California in nearly two decades.

On the GOP side, Riverside County Sheriff Chad Bianco last month became the first major Republican to announce a bid to replace Newsom, whose term runs through early January 2027. He blamed Democrats for the ongoing homeless crisis and runaway housing prices.

Even if Harris gets in the race, the state’s open primary system can be unpredictable — all candidates appear on a single ballot, regardless of party, and only the top two vote-getters advance to the November general election. Trump-aligned candidates could enter on the GOP side, generating conservative interest, or a wealthy candidate could emerge with the funds to rattle the expected order.

“These open primaries are hard to handicap,” said Democratic consultant Andrew Acosta. “It just makes it harder to predict.”

Porter, a progressive favorite, created an online backlash after losing the 2024 Senate race, when she faulted “billionaires spending millions to rig this election.” She finished third in the primary — behind Democrat and now-Sen. Adam Schiff and Republican Steve Garvey — and did not advance to the November election.

Some likened her words to Trump’s baseless claims of election fraud in 2020. Porter later clarified her initial statement to say she didn’t believe the California vote count or election process had been compromised but she didn’t recant her earlier remarks. Rigged, she said in a follow-up, “means manipulated by dishonest means.”

She has been an active fundraiser since leaving her Southern California House district in January and returned to teaching at the University of California, Irvine, School of Law.

A consumer protection attorney before her election to the House, Porter became known in Congress for her unsparing interrogations of business leaders and other committee witnesses, often using her whiteboard to break down complex figures while using plainspoken language to assail corporate greed.

First elected to Congress in 2018, Porter said in her video that “I first ran for office to hold Trump accountable. I feel that same call to serve now to stop him from hurting Californians.”

Michael R. Blood, The Associated Press



Secretary of State Marco Rubio says the Trump administration has finished its six-week purge of programs of the six-decade-old U.S. Agency for International Development, cutting 83% of them, and said he would move the remaining aid programs under the State Department.

Meanwhile, Republicans face a critical test of their unity when a spending bill that would avoid a partial government shutdown and keep federal agencies funded through September comes up for a vote. Speaker Mike Johnson is teeing up the bill for a vote as soon as Tuesday despite the lack of buy-in from Democrats, essentially daring them to oppose it and risk a shutdown that would begin Saturday if lawmakers fail to act.

Here’s the latest:

Trump says he’ll buy a Tesla to show support for Elon Musk

President Donald Trump says Musk, who’s effectively running the Department of Government Efficiency (DOGE), has been “putting it on the line” for America and he’s going to show his support for the Tesla CEO by buying one of his electric vehicles.

Shares of Tesla slid again Monday as confidence in Musk’s electric car company continues to disintegrate following a post-election “Trump bump.”

Trump said on his social media platform that he was “going to buy a brand new Tesla” on Tuesday “as a show of confidence and support for Elon Musk, a truly great American. Why should he be punished for putting his tremendous skills to work in order to help MAKE AMERICA GREAT AGAIN???”

Musk has become the face of the Trump administration’s government downsizing efforts.

Analysts have said Musk’s shift to right-wing politics doesn’t appear to sit well with potential Tesla buyers, generally perceived to be wealthy, environmentally-conscious liberals.

Kentucky bourbon makers fear becoming ‘collateral damage’ in Trump’s trade war

The trade wars pose an immediate threat to an American-made success story, built on the growing worldwide taste for bourbon, Tennessee whiskey and other products.

Kentucky Democratic Gov. Andy Beshear said the president’s zig-zagging tariff policy is hurting the American economy and will lead to higher consumer prices while disrupting business.

Trump on Thursday postponed 25% tariffs on some imports from Canada for a month amid fears of the economic fallout from a broader trade war. Yarbrough said his company’s expansion plans are still in limbo.

For an industry that has to plan well into the future, based on aging its whiskey products, such angst is widespread in Kentucky, which produces 95% of the world’s bourbon supply. At this point even a delay in tariffs wouldn’t alleviate the practical problems confronting U.S. whiskey makers.

▶ Read more about how Kentucky bourbon makers are being impacted

Ukraine-US talks on ending war with Russia start in Saudi Arabia as Kyiv launches huge drone attack

Senior officials from Ukraine and the United States opened talks Tuesday on how to end Moscow’s three-year war against Kyiv, hours after Russian air defenses shot down more than 300 Ukrainian drones in the biggest such attack since the Kremlin ordered the full-scale invasion of its neighbor.

Two people were killed and 18 were injured, including three children, in the massive drone attack that spanned 10 Russian regions, officials said. No large-scale damage was reported.

Meanwhile, Russia launched 126 Shahed and other drones and a ballistic missile at Ukraine on Tuesday, the Ukrainian air force said, as part of Moscow’s relentless pounding of civilian areas during the war.

In the Red Sea port city of Jeddah, Saudi Arabia, journalists briefly entered a room where a senior Ukrainian delegation met with America’s top diplomat for talks on ending Europe’s biggest conflict since World War II.

▶ Read more about the talks in Saudi Arabia

Rubio says purge of USAID programs complete, with 83% of agency’s programs gone

Secretary of State Marco Rubio said Monday the Trump administration had finished its six-week purge of programs of the six-decade-old U.S. Agency for International Development, cutting 83% of them, and said he would move the remaining aid programs under the State Department.

Hours later, a federal judge said Trump had overstepped his authority in shutting down most foreign assistance, saying the administration could no longer simply sit on the billions of dollars that Congress had provided for foreign aid. But Judge Amir H. Ali stopped short of ordering Trump officials to use the money to revive the thousands of terminated program contracts.

Rubio made his announcement Monday in a post on X, in one of his few public comments on what has been a historic shift away from U.S. foreign aid and development, executed by Trump political appointees at State and Elon Musk’s Department of Government Efficiency teams.

Rubio in the post thanked DOGE and “our hardworking staff who worked very long hours to achieve this overdue and historic reform” in foreign aid.

▶ Read more about the dismantling of USAID

The Associated Press




After one of the worst single day sell-offs in Tesla’s history, President Donald Trump threw his support behind his advisor, billionaire Elon Musk, vowing to buy one of his cars on Tuesday.

Tesla has been pummeled this year under competition from rival electric vehicles, particularly out of China, as well as his close association with Trump and with far right causes globally.

Shares have plummeted 45% in 2025 and on Monday tumbled more than 15% to $222.15, the lowest since late October, reflecting newfound pessimism as sales crater around the globe.

In an overnight post on his Truth Social platform, Trump said Musk is “putting it on the line” to help the country. Trump claimed in the post that “Radical Left Lunatics” were attempting to “illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ‘baby.”

The stock climbed more than 3% before the market open on Tuesday.

Numerous auto industry analysts have attributed Tesla’s recent sagging stock — and auto sales — to Musk’s support of Trump and other far right candidates around the world. In recent days, Tesla showrooms in the U.S. have been besieged by protesters, its vehicles vandalized on the street. Tesla owners, perhaps in a bid to avoid being targeted, have placed bumper stickers on their cars with messages like, “I bought it before Elon went nuts.”

Federal prosecutors charged a woman in connection with a string of vandalism against a Colorado Tesla dealership, which included Molotov cocktails being thrown at vehicles and the words “Nazi cars” spray painted on the building.

Musk pumped $270 million into Trump’s campaign heading into the 2024 election, appeared on stage with him and cheered Trump’s victory over Democratic candidate Kamala Harris in November. Tesla stock soared to $479 per share by mid-December, but have since lost 45% of their value.

Musk has become the face of the Trump administration’s slash-and-burn government downsizing efforts, known as the Department of Government Efficiency, or DOGE. The department has promised massive federal worker layoffs and aims to drastically reduce government spending.

Analysts have said Musk’s shift to right-wing politics doesn’t appear to sit well with potential Tesla buyers, generally perceived to be wealthy and progressive consumers.

Tesla sales are falling precipitously in California, the company’s biggest U.S. market, and the company recorded its first annual global sales decline last year. Similarly, Tesla sales plunged 45% in Europe in January, according to research firm Jato Dynamics, even as overall electric vehicle sales rose. The sales numbers were particularly bad in Germany and France.

The latest auto sales figure from China show that Tesla sales there have been nearly halved from February a year ago, although the decline is largely due increased competition from domestic EV companies.

But sales in the U.S. have fallen due to competition, and a country sharply divided about Trump.

U.S. Analysts at UBS Global Research expect deliveries to fall 5% in the first quarter and full year compared to the same periods for 2024.

“Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within two weeks) in key markets which we believe is indicative of softer demand,” they wrote.

In addition to backing Trump, Musk has also shown support for the far-right, pro-Russian, anti-Muslim party in German y, called the British p rime minister an “evil tyrant” and called Canada — a major Tesla market —”not a real country.”

Tesla is not the only Musk-led company to run into trouble recently. His X social media platform crashed several times on Monday, which Musk claimed was a “massive” cyberattack. But like the clear-cutting he’s done with federal jobs, Musk slashed the number of employees at X and technology experts warned of increased vulnerability.

Last week, a rocket launched by Musk’s SpaceX exploded and broke apart over Florida, about two months after another of the company’s rockets failed.

Associated Press, The Associated Press


LANSING, Mich. (AP) — Garlin Gilchrist II, a Democrat from Detroit who is Michigan’s first Black lieutenant governor, announced he’s jumping into the crowded 2026 race for governor on Tuesday.

A software engineer by trade, Gilchrist vaulted from relative political obscurity in 2018 to run alongside Gov. Gretchen Whitmer, and his profile has been bolstered over the past six years by working closely with one of the nation’s most high-profile Democrats.

“When you have a problem, an engineer can fix that problem,” Gilchrist said in an interview with The Associated Press ahead of his announcement, saying he’s built up relationships in each of the state’s 83 counties. “That’s a story that I’m going to tell.”

As governor, he said he’ll focus on expanding affordable housing and improving access to health care, particularly mental health services.

He recognized that voters sent President Donald Trump back to the White House in part because of frustration with a “status quo that wasn’t serving them.” Trump notched a 1.5-point victory in Michigan last fall.

“That anger comes from not having results, from things not working,” said Gilchrist. He described moving to Washington state to work for Microsoft after graduating from the University of Michigan, but says that as governor, he’ll make sure residents can “be their best self here.”

“I want us to make good choices today so that the people of Michigan know that they can take their next step here,” he said. “They can build their careers and their families and their futures here.”

Still, Gilchrist will have to balance that narrative with his role near the top of the Democratic Party, which held full control of state government from 2022 to 2024. Gilchrist in his AP interview did not break from Whitmer, calling her an ally and said they have “laid a really good foundation for the future of the state of Michigan.”

Gilchrist is seen as a rising star in the Democratic Party. His hometown Detroit is the state’s largest Democratic stronghold and nearly 80% Black, bolstering his appeal. If elected, Gilchrist would be the first Black governor of the state. However, before joining Whitmer on the Democratic ticket, he ran for Detroit City Clerk in 2017 and narrowly lost to incumbent Janice Winfrey.

Lieutenant governors also don’t have a good track record in Michigan when trying to ascend to the governor’s office, with the most recent example being Republican Brian Calley, who was trounced in the party’s primary in 2018.

Gilchrist joins Secretary of State Jocelyn Benson and Genesee County Sheriff Chris Swanson in the 2026 Democratic primary. Whitmer has said she won’t endorse any candidate.

The primary winner could face an uphill battle in the general election. Along with a Republican opponent — Republican Senate Leader Aric Nesbitt is seen as the leading candidate currently — they may also contend with Detroit Mayor Mike Duggan, a former Democrat now running for governor as an independent.

Joey Cappelletti, The Associated Press


TORONTO — Doctors who were thrust into national fame when COVID-19 hit five years ago say they try to focus on positive feedback from the public rather than the angry backlash and threats of violence they faced.

British Columbia public health chief Dr. Bonnie Henry still has a security detail to this day because of threats against her and her family from people angry about lockdowns or opposed to COVID vaccination.

Henry says some people were lashing out in a time of crisis and many believed widespread vaccine disinformation — but she continued to emphasize the importance of kindness and getting through the pandemic together.

University of Alberta infectious diseases specialist Dr. Lynora Saxinger says she keeps Thank You letters and cards from people grateful for her guidance during the pandemic as an antidote to hateful emails or social media posts.

Nova Scotia chief medical officer Dr. Robert Strang says his family was threatened, but the vast majority of people he interacted with online or in-person were kind and thankful.

All three doctors say they’ve learned it’s important to communicate clearly to build trust — including explaining how decisions and advice can change during a public health crisis as new scientific evidence becomes available.

This report by The Canadian Press was first published March 11, 2025.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

Nicole Ireland, The Canadian Press


HALIFAX — A dispute over who should pay the cost of protecting the narrow low-lying strip of land that links Nova Scotia and New Brunswick is before the Nova Scotia Court of Appeal today.

Over two days, a three-member panel will hear the case brought against the federal government by the provinces of Nova Scotia, New Brunswick and Prince Edward Island.

In a legal filing in July 2023, Nova Scotia government asked the court for an opinion on which level of government is responsible for covering the cost of protecting infrastructure on the Chignecto Isthmus from severe flooding.

The provinces maintain that Ottawa should pay for the entire cost of upgrading the isthmus, currently estimated at $650 million.

To date, the federal government has agreed to pay $325 million, or half the cost, under its disaster mitigation and adaptation fund.

Climate researchers warn that one severe tidal storm is capable of overcoming the area’s dikes, flooding communities and halting the transportation of goods and services across the area.

This report by The Canadian Press was first published March 11, 2025.

The Canadian Press


OTTAWA — Only two of the candidates in the Liberal leadership race — Mark Carney and Ruby Dhalla — disclosed their fundraising events to Elections Canada.

A political transparency advocate says this exposes a “loophole” in the rules for funding political campaigns that needs to be closed — since some of the contenders held fundraisers without publicly disclosing them or reporting who attended.

Carney reported eight fundraisers to Elections Canada over the course of the two-month race, while Dhalla — whom the party eventually kicked out of the race — disclosed one.

But Chrystia Freeland — who held several fundraiser events during the race — and candidates Frank Baylis and Karina Gould did not add any information to the public disclosure list.

Leadership candidates and political parties must disclose their fundraisers in advance if they meet certain conditions — if, for example, at least one person had to pay more than $200 to attend a fundraiser. If they break the disclosure rule, they have to return the money.

A fundraiser Freeland held on Feb. 10 listed on Eventbrite in Toronto’s Etobicoke area only states that the “recommended donation amount” was between $500 and $1,750.

“This is a loophole that allows someone to go and lobby (candidates) without it being disclosed,” said Duff Conacher, co-founder of Democracy Watch.

He said the public has a right to know who is organizing, holding and paying to attend fundraising events so that access to politicians through donations can be tracked. He said this prevents the appearance of a conflict of interest from “tainting politicians’ policy-making decisions.”

The Liberal government passed Bill C-50 in 2018 that ushered in the fundraiser disclosure requirements, in response to a wave of criticism of opaque, pricey fundraisers featuring Prime Minister Justin Trudeau and other cabinet ministers.

“The whole reason for the act was to be tracking fundraising events and who’s attending,” Conacher said.

Ottawa-based lawyer Scott Thurlow, an expert in Canadian elections law, said he wouldn’t describe this as a “loophole” since the rules were designed this way.

“Parliament’s made a deliberate decision to do that,” he said. “If one person pays $200, then they have to enumerate the contributors who do so.”

The rules state that parties and candidates have a month after holding a fundraiser that counts as a regulated event to disclose the names of those who attended. A fundraiser is also considered a regulated event if it’s attended by prominent people such as leadership candidates, party leaders or cabinet ministers.

“I don’t think there’s anyone who’s breaking any rules here,” Thurlow said.

Freeland’s campaign spokesperson Katherine Cuplinskas said the campaign “followed all rules set out” by the party and Elections Canada.

The Baylis campaign held dozens events in B.C., Alberta, Ontario and Quebec, but did not officially make any of them fundraisers.

“All our events throughout the campaign were non-ticketed events,” said Baylis campaign spokesperson Justin McIntyre. “Supporters could attend on their own terms, making a donation if they chose to do so.”

Gould’s campaign has said previously she did not hold any fundraiser events; it did not offer a comment on Monday.

Gould was the democratic institutions minister who shepherded Bill C-50 through Parliament.

Carney’s campaign has posted one report so far that lists those who attended a fundraiser held in Ottawa on Feb. 6. They included several prominent Liberal lobbyists and residents of Ottawa’s posh Rockcliffe area, along with former Ontario premier Dalton McGuinty.

Carney’s next fundraising report, for an event held in Vancouver, B.C., will have to be disclosed a few days from now.

Sachit Mehra, the Liberal party’s president, said Sunday evening that the party has just experienced its greatest first quarter “grassroots” fundraising result ever — and the reporting period hadn’t even closed yet.

This report by The Canadian Press was first published March 11, 2025.

Kyle Duggan, The Canadian Press


LOUISVILLE, Ky. (AP) — With a new distillery set to open soon, the makers of Brough Brothers bourbon in Kentucky were ready to put their business plan into action. They were looking to ramp up whiskey production to break into lucrative new markets in Canada and Europe.

Now the on-again, off-again threat of tariffs has disrupted those plans.

Efforts by the Black-owned distiller to gain a foothold in Canada are on hold, as are plans to break into Germany and France, said Brough Brothers Distillery CEO Victor Yarbrough. That’s because the iconic American spirit’s widening global appeal is caught in the crossfire of trade conflicts instigated by President Donald Trump.

“It’s extremely frustrating,” said Yarbrough, who started the Louisville distilling company with his brothers, Bryson and Chris. “We are collateral damage.”

For distillers looking to sell to consumers of all political stripes, talking politics can be as distasteful as discussing Prohibition. But along with the turmoil and uncertainty over tariffs, bourbon makers and other U.S. firms trying to do business in Canada are confronting public relations challenges still reverberating from the president’s blunt-force “America First” approach to international relations.

With Canadian hockey fans booing the U.S. national anthem and some liquor stores north of the border clearing American spirits from their shelves even before there’s clarity over tariffs, businesses like Brough Brothers are watching to see how the trade conflict plays out.

In the building being converted into the new distillery near the Ohio River, drywall dust covers the floor of the project that the brothers hope will raise the company’s profile in the ultra-competitive bourbon world.

“I believe there’s going to be some type of repair of the relationships that needs to happen,” said Yarbrough, who was hoping, before the trade war erupted, to introduce his bourbon in New Brunswick and later expand to Ontario and other parts of Canada. “So I think some type of media blitz, PR blitz is definitely going to have to take place.”

An expanding market hampered by uncertainty

The trade wars pose an immediate threat to an American-made success story, built on the growing worldwide taste for bourbon, Tennessee whiskey and other products.

Kentucky Democratic Gov. Andy Beshear said the president’s zig-zagging tariff policy is hurting the American economy and will lead to higher consumer prices while disrupting business.

“It’s not just the imposition of tariffs, it’s this month-to-month, ‘I may do it to you at any moment’ policy,” said Beshear, a potential presidential candidate in 2028. “You can’t create stability.”

Trump on Thursday postponed 25% tariffs on some imports from Canada for a month amid fears of the economic fallout from a broader trade war. Yarbrough said his company’s expansion plans are still in limbo.

“It doesn’t change our situation,” he said. “Just as quickly as it changed to a reprieve, it could just as quickly turn into next month that we’re back on.”

For an industry that has to plan well into the future, based on aging its whiskey products, such angst is widespread in Kentucky, which produces 95% of the world’s bourbon supply. At this point even a delay in tariffs wouldn’t alleviate the practical problems confronting U.S. whiskey makers.

“The issue for us is long-term planning, and a postponement does nothing for us in long-term planning except leaves it still up in the air,” said Judy Hollis Jones, president and CEO of Buzzard’s Roost in Louisville, which sells to two provinces in Canada and has been looking to expand.

“Maybe other people adapt to it easier than I do, but I tend to like some certainty,” Jones said.

The Kentucky Distillers’ Association says the newest trade conflicts feel like deja vu. The industry group has long sounded the alarm that tariffs and retaliatory levies would wreak havoc on the spirits industry. Along with the North American trade dispute, the European Union is set to reinstate a tariff by April 1 on American whiskey if nothing is done to head it off.

That trans-Atlantic dispute is a reprise of Trump’s first-term tariffs on European steel and aluminum. The EU’s retaliatory tariff caused American whiskey exports to the EU to plunge 20%, costing distillers more than $100 million in revenue from 2018 to 2021, the Distilled Spirits Council says. Once the tariff was suspended, EU sales rebounded for American distillers.

Threat of ‘irreparable harm’ to distillers

Now, Europe’s infatuation with Kentucky bourbon and other U.S. spirits is threatened by the potential 50% tariff — double the previous levy — that would inflict “irreparable harm to distillers large and small,” said Chris Swonger, the council’s CEO.

Tariffs amount to a tax, which whiskey producers can either absorb in reduced profits or pass along to customers through higher prices — and risk losing market share in highly competitive markets. In 2024, the EU was by far the largest export market for U.S. distilled spirits, followed by Canada, the council said.

Trump maintains that open trade has cost the U.S. millions of factory jobs and that tariffs are the path to American-made prosperity.

Large distillers possess the capital and market reach to ride out disruptions caused by tariffs — built-in luxuries that most small producers don’t have.

Canada accounts for just 1% of total sales for Brown-Forman Corp., the maker of Jack Daniel’s Tennessee Whiskey, and the Louisville-based company could withstand disruptions there, said its CEO, Lawson Whiting.

But Whiting said the decision by Canadian provinces to take American products off store shelves is “worse than a tariff because it’s literally taking your sales away.” He called it “a very disproportionate response to a 25% tariff.”

The threat of a prolonged trade war has Brough Brothers exploring other options. They could lean harder into domestic sales or look for other markets overseas — but again, it’s hard to plan.

“Talking about this is starting to make my head hurt,” Yarbrough said.

For Tom Bard, another Kentucky craft distiller, the risk is that all his hard work to gain a foothold in Canada could evaporate due to the cross-border trade conflict.

Bard and his wife, Kim, own The Bard Distillery in Muhlenberg County in western Kentucky. Their products had penetrated British Columbia and Alberta, but a new purchase order for north of the border is on hold amid Trump’s ever-changing trade war.

“That hurts,” Bard said. “For a small distillery like us, where every single pallet that goes out the door makes a huge difference, that’s huge for us.”

Bard said his team invested heavily to break into Canada, where business grew so quickly that he had hoped it would account for at least 25% of his overall sales this year.

“We’d love to ship as much of it as we can to Canada,” Bard said. “We just expanded our distillery to take advantage of all the global demand for our products. What we hate is that once we get this equipment online this year, that we won’t be able to run it full throttle because we’ll be afraid to put too much inventory away not knowing what’s going to happen.”

The dispute needs to be resolved before Canadian distributors will risk accepting shipments of American spirits, he said.

Bard plans to ramp up domestic distribution to try to make up for lost sales in Canada.

“We’re small-business Americans, so we’re going to make it work,” he said. “But it would be nice to not have these roadblocks.”

___

Associated Press writer Paul Harloff in New York contributed to this report.

Bruce Schreiner And Dylan Lovan, The Associated Press