Trade War Escalates

Posted 05/13/2019

We were hopeful that the high level Chinese delegation would reach a deal with the US administration during trade talks in Washington DC, but this was not to be. We ended last week with the Trump administration slapping new tariffs on virtually all Chinese made imports (including alcoholic beverages) and today, the Chinese retaliated, imposing new or higher tariffs on over 5,000 products. Effective June 1, China will add additional increases to the already increased tariff rate on various USA origin products, and wine is one of the items on the list. USA origin wine shipping to China was already subject to two other tariff increases since the trade dispute with China started -- a 15% increase in April of 2018 followed by an additional 10% in September, and on June 1st, another 15% will be added. 

US wine exports to China have decreased by approximately 25% in value in 2018, and volumes have decreased approximately 13%. China is still one of the largest importers of USA alcoholic beverages, but this next tariff increase will further impact USA exports. Other alcoholic beverages are also targeted and we will follow with further updates as we make our way through the lists.  

Australia and Chile are two countries set to capitalize on the ongoing trade war as each of these countries have preferential trade agreements with China. We expect to see these countries' exports to China continue to grow. 

Should you need additional information or specific HTS (Harmonized Tariff) data, please feel free to contact us at any time.