Hit by trade war, California winemakers see their carefully cultivated market in China shrivel
- Big tariffs and anti-American sentiment have hit hard, soon after US vineyards developed a following among Chinese consumers
- ‘Wine exporters are worried they may never be able to recover market share in China, which they naturally have long seen as a huge opportunity for profit’
Dylan Wang and Sherry Duan hold their glasses up to the light before tasting the Atlas Peak merlot and Howell Mountain cabernet at Duckhorn Winery’s tasting room, overlooking acres of ripe grapes.
Wang, 39, an investment fund manager, and Duan, a 32-year-old lawyer, came here to California’s famed Napa Valley from Shanghai to enjoy the wine, scenery and cool weather, and chose Duckhorn in part because president Barack Obama served its wine at his 2009 inauguration.
One advantage of travelling all the way from China: they’re avoiding prohibitive tariffs. California wineries, already battling tough global competitors, rising costs and labour shortages, are increasingly fearful the US-China trade war will exact irreversible damage after years of cultivating China’s market as carefully as their vines.
“California wine exporters are worried they may never be able to recover market share in China,” said Jock O’Connell, international trade adviser with Beacon Economics, “which they naturally have long seen as a huge opportunity for profit.”
California wine exports to China are wilting. The Golden State accounts for some 95 per cent of US wine production and exports, with China sales set to hit US$30 million this year, down from US$78.7 million in 2017.
Even as Chinese taxes and punitive tariffs on US wine have doubled to 98 per cent, a free-trade agreement Australia signed with Beijing has given that country tariff-free access to China’s giant market.