(MENAFN- The Conversation) California's vintners and grape growers are among the latest potential victims in the escalating trade spat between the U.S. and China.
Responding to U.S. plans to impose import duties on goods from China, the Chinese Ministry of Commerce reciprocated by introducing new tariffs on 128 U.S. products, including an additional 15 percent import tariff on wine.
Wine producers in California are concerned about the immediate and longer-term implications of this new tariff, on top of those already in place. Reports have already begun to circulate about orders being canceled, redirected or renegotiated as a result.
How worried should U.S. winemakers be?
The US wine industry
The U.S. is a major player in the global wine industry both in terms of consumption and production.
Americans consumed 3.59 billion liters of wine in 2016, or about 11.1 liters per person. About a third of that was imported.
In terms of production, the U.S. ranks fourth after Italy, France and Spain – making more than 3 billion liters in 2016. California produced about 85 percent of that, while the rest comes from a variety of states, including Washington, Oregon and New York.
While the vast majority of U.S. wine is consumed domestically, about 10 percent is shipped overseas. In 2017, the U.S. exported 380 million liters of wine worth US$1.46 billion. Canada was the top destination, importing 28 percent of the total, followed by the U.K. with 15 percent, Hong Kong at 8 percent and Japan with 6 percent.
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