retail news in context, analysis with attitude

The New York Times writes about about a trade war with China - as reflected in tariffs imposed back and forth by the two nations - could have an enormous impact on US wineries that have “spent years trying to carve out a place in the hearts of wealthy Chinese consumers. That hard work has earned them a prized sliver of what is becoming one of the fastest-growing markets for wine imports.

“China’s imports of American wine reached $82 million last year — not including bottles entering duty-free through Hong Kong — a sevenfold increase in the last decade.”

When it was looking to retaliate against tariffs assigned by the Trump administration, the Chinese government selected wine as one of the categories to be hit with an extra 15 percent tariff. That served as what the Times calls “a gut punch to winemakers marketing their wares to the mushrooming legions of young, recently wealthy Chinese.”

That 15 percent, by the way, is on top of existing taxes and tariffs that increase the cost of a bottle of wine that in the US would cost $25 to $100 in China.

The story notes that “Chilean and New Zealand wines face no Chinese levies, thanks to free-trade agreements. Australian bottles will enter the country tariff-free next year.”
KC's View:
I’m not too worried about “the mushrooming legions of young, recently wealthy Chinese” being unable to afford great wine. I’m more worried about US winemakers - and other companies, especially in the agriculture sector - facing real headwinds in their export businesses that cause them economic pain.

In all fairness, though, I’m not a trade expert, so I have no idea how this all turns out. I think I understand the ani-tariff argument, though I’m not nearly qualified to debate the issue with any assurance.