A winegrape vineyard in San Joaquin County is removed earlier this year due to a yearslong downturn in wine sales. Several Canadian provinces have banned the sale of alcohol from the U.S.
State’s farmers seek fairness in trade talks with Canada commodity groups.
By Caleb Hampton Agricultural groups in California are pay- ing close attention this month to the trade relationship between the U.S. and Canada. The North American neighbor has long been the top export market for agricultur- al products from California and the U.S. as a whole. But a trade conflict that began shortly after President Donald Trump re- turned to office last year has put that rela- tionship on fragile footing. “There has been a lot of volatility,” said James Sayre, an international trade researcher and assistant professor of Co- operative Extension at the University of California, Davis. The dispute reached another inflection point last month when the Trump ad- ministration announced plans to impose new 50% tariffs on some Canadian goods. Meanwhile, the two nations and Mexico began negotiations on the renewal of the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement during Trump’s first term as president. “The purpose of USMCA was to secure guaranteed access for producers in all three countries into the other ones’ mar- kets,” Sayre said. Bilateral agricultural trade between the U.S. and Canada last year was valued at $9.2 billion, according to federal data. On July 1, which marked the first re- view deadline since the trade pact began in 2020, the Trump administration opted not to approve a 16-year extension of the USMCA. The trade agreement remains in effect, but the decision by the U.S. not to automatically extend it triggered an annual review and negotiation process. Amid that backdrop, stakeholders from both sides of the border met last week at a closed-door meeting in Sacramento to dis- cuss their priorities. Those in attendance included California Department of Food and Agriculture Secretary Karen Ross, Ca- nadian Consul General Rana Sarkar and representatives of various agricultural
“Trade is extremely important to Cal- ifornia agriculture,” said Matthew Viohl, director of federal policy advocacy at the California Farm Bureau, which hosted the meeting. “We want to be leaders on this, and we’ll continue to take this conversa- tion to D.C. and emphasize our goals.” Among the topics discussed, Viohl said, were bans on U.S. alcohol sales imposed by several Canadian provinces. The provincial bans came in response last year to Trump’s tariffs on Canadian products and his promises to annex Can- ada and make it a U.S. state, which caused California wine sales to Canada to plum- met from $404 million in 2024 to $90 mil- lion last year. Trump cited Canada’s “discrimination” against U.S. alcohol last month in his proc- lamation announcing new tariffs on Ca- nadian goods, which were scheduled to take effect Aug. 19 if Canada does not meet certain conditions. The collapse of the Canadian mar- ket worsened an already bleak outlook for California winegrape growers and wine producers. “That’s a really strong headwind on top of the other headwinds they’re already fac- ing,” Sayre said. In recent years, a global downturn in wine consumption left the state with a persistent oversupply of grapes. In each of the past three years, some of California’s winegrape crop went unpicked due to lack of demand. Last year, a record amount of around 820,000 tons of winegrapes—about a quarter of the crop—went unpicked, ac- cording to industry estimates. Sarkar, the Canadian official, said the country’s government could not speak to the bans on California wine because “de- cisions on the sale of alcoholic beverages in Canada are made at the provincial level.” He added, “Canada remains committed to constructive engagement with the U.S. and to restoring predictability in our trading See TRADE, Page 15 August 5, 2026 Ag Alert 3
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