After the Trump administration imposed tariffs on aluminum and steel last month, risking a trade war with China and resulting in U.S. job losses including the American Keg Company laying off a third of its workers in the end of March, China has retaliated with its own tariffs on American goods, including wine.
According to the BBC, the new tariffs—totaling $3 billion on 128 U.S. imports—pose a threat to the U.S. wine industry, with wine facing a duty increase of 15 percent. Other goods hit with tariff hikes include pork, fruit, and nuts.
The California Wine Institute, representing around 1,000 vineyards and wineries in the U.S., said the 15 percent tax could be “catastrophic,” the BBC reported.
“It’s a wait-and-see game right now,” Michael Parr, vice president of international sales for Wente Family Estates, said in an interview. The tariffs have caused 5,000 cases of Wente Vineyards wine destined for China to be held in limbo in California’s Livermore Valley, the BBC reported. Parr added, “We’re not in a position to lose market share.” According to the BBC, the family-owned producer has seen an 80 percent increase in exports to China this year.
Overall, wine is a small fraction of the trade between the U.S. and China—exports represent 5 percent of U.S. wine sales, and about 5 percent of those exports are to China—but that’s $79 million of wine exports that winemakers can’t afford to lose, the BBC said.
This is especially true now, as Chinese tastes are changing—wine consumption increased nearly 500 percent since 2000, much of which is due to imports, the BBC reported.
