From Steel Tariffs to Wine Tariffs, China Retaliates

China has recently retaliated against the rate increases the Trump administration levied on steel and aluminum in March. The retaliation: raised tariffs on U.S. wines and a range of other American products. At Skolnik, we’re always keeping an eye on the intersection of steel and wine, so allow us to break it down for you.

The new tariffs raise the rates on U.S. wines entering China by 15 percent, adding to pre-existing tariffs and taking the total levies paid on a bottle of American wine to 48.2 percent to 67.7 percent.

As America has continued to grow as a major exporter of wine, China has emerged the fifth-largest export market for U.S. wines, accounting for $80 million of American wine sales. According to a report from Wine Institute, the trade group for more than 1,000 California wineries, consumption of imported wine in mainland China has increased 2.5 times in the past five years. This new, increased tariff adds to pre-existing tariffs that already put American winemakers at a disadvantage to other countries. Wines from Chile, New Zealand and Georgia, for example, already enter China tariff-free. Wines from Australia will also be tariff-free in China by 2019.

As manufacturers of stainless steel wine drums, we’re usually enthusiastic to see steel and wine come together in a news story. However, this tariff to tariff story is a new exception.