US-China relations: why Californian wines are bubbling back from Trump’s trade war
- Following the outbreak of the US-China trade war, Beijing raised tariffs and taxes on US wine from 48.2 per cent to 93 per cent per bottle
- Since then winemakers have recouped losses by reselling domestically, diversifying markets and cautiously re-entering mainland China
David Kent was initially in disbelief when a trade war between China and the United States broke out in March 2018, leading to the world’s top economic powers slapping tariffs on each other.
When Chinese tariffs hit US wines early that year, the industry veteran figured they would not last and lowered prices on 3,600 cases of wine he was shipping to China.
But within six months, his winery Darcie Kent Vineyards – nestled in the arid mountains about 80km (50 miles) east of San Francisco – quit the Chinese market altogether, as Kent realised he was no longer moving new bottles and customs officials were delaying shipments over labelling glitches.
“It was very difficult,” said Kent, a former executive director with the country’s largest winery, E&J Gallo. “It took a couple of years to get back where we used to be, but we’re there now.”
04:01
Chinese wineries gaining domestic recognition amid Covid-19 pandemic
Since the initial salvoes of the trade war, many of California’s 4,200 wineries have recouped their losses by reselling domestically, expanding into other countries and capitalising on Chinese tariffs placed on Australian wine, which has made their product more competitive.