Top 10 news of 2018 in China’s wine market

2. China-US trade war

The China-US trade war has been dominating news cycle as the two of the world’s biggest economies launch into a tit-for-tat trade war. As a result, American wine, whisky, beer are caught in the crossfires.

Last March when the Trump administration announced tariff increases on Chinese exports of aluminium, cars and solar panels, the Chinese government fought back with 15% tariff on American products including wine.

The news was a shock to growers in California, which produces close to 90% of wines in the country, as American wines were gradually gaining traction in the Chinese market. The retaliatory move prompted the California Wine Institute’s CEO to warn that it could mean “lost market share for years to come.”

American wine exports (97% from California) to Greater China grew 10% by value to more than US$210 million last year.

In September, the trade war escalated with both engaging in further protective measures. China levied additional 10% on American wine as a result, bringing the total taxes on American wines to nearly 80% compared with the usual 50%.

Since the trade war started last year, it has sent uncertainties to global economy and growth. What perhaps is more dangerous is a larger extent of shunning American products as a result of nationalism, and American wine falling into this category would then become collateral damage.

At the moment, the two countries have called for a truce until 1 March to negotiate possible deals.

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