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China threatens US wine with retaliatory tariffs

California's wine trade body has warned that there is a risk of 'years of lost market share' in China if Chinese officials press ahead with threats to punish American wine shipments, as well as more than 100 other goods, following a trade dispute with the US government.

China’s Commerce Ministry said that it would hit back if the US goes ahead with import tariff plans on imports of Chinese steel.

China will impose tariffs on 128 US products with a combined import value of around $3 billion, the Ministry of Commerce announced on Friday (23 March).

A first wave of tariffs would hit several sectors, including wine, fruit and nuts, and tariffs would likely be around 15%, the ministry said.

It added that China might also file a complaint against the US at the World Trade Organisation.

The dispute could be a worry to US winemakers.

‘Chinese retaliation against US wine would put our producers at a significant disadvantage in one of the most important markets in the world at a critical time,’ said the California Wine Institute’s CEO, Robert Koch.

‘As a result of free trade agreements, a number of our foreign competitors will soon have tariff free access to the China market.

‘This, combined with additional punitive tariffs on California wine, could results in lost market share for years to come.’

US wine exports to ‘Greater China’, including the Mainland, Hong Kong and also Taiwan, were valued at $210 million in 2017, up 10% on the previous year, said the California Wine Institute earlier this month. Total US wine exports for 2017 were $1.53bn.

‘Consumption of imported wine has increased 2.5 times in the last five years on the Chinese Mainland,’ said Christopher Beros, California Wine Institute trade director for China and Pacific Rim.

The value of US wine exports to mainland China has risen by 450% in the past decade, according to the Institute. California represents 97% of US wine exports globally, it said.

Some observers pointed out that China’s reaction and threats to around $3bn of US goods had been relatively restrained after Trump’s administration in the US announced investment restrictions and tariffs on Chinese goods that were estimated to affect $60 billion-worth of products.

Exports of US goods and services to China were worth around $170 billion in 2016, according to US government statistics, meaning the US had a trade deficit with China of around $385bn.

There were reports over the weekend that the two countries might be able to resolve their differences with negotiations.

Updated on 26 March 2018 with fresh comments from the California Wine Institute, following an initial news story on Friday 23 March.

See also: China agrees to end anti-dumping probe into EU wines

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