"It’s extremely frustrating,” said Brough Brothers Distillery CEO Victor Yarbrough, who started the Louisville distilling company with his brothers. “We are collateral damage.”

Distilleries in the heart of America's bourbon industry are finding themselves in the crosshairs of a brewing trade war between the U.S. and Canada.

The tech-driven bourbon industry struggles with canceled orders and halted expansion. The iconic Kentucky bourbon industry, a major contributor to the state’s economy, is now facing significant losses due to escalating trade tensions between the United States and Canada.

Stores in Canada have been removing U.S.-made bourbon from their shelves in retaliation for stiff tariffs placed on the nation's goods.