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June 17, 2019

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California wine firms go sour on US trade rift

The wine businesses in the state of California, accounting for 90 percent of the United States’ total wine exports, are concerned about the long-term market loss in China as a result of the US-initiated trade war against China.

“It’s the future opportunities that we feel we might lose out on,” said Michael Parr, vice president of international sales for Wente Family Estates, on Saturday.

The Livermore, California-based Wente Vineyards, is the oldest family-owned winery in the US. It has been exporting wines to China for 25 years.

Parr said the firm has significant room for development in China but the frustration with the tariffs is withholding it from expanding beyond the current market share.

California wine exports to China have been adversely affected after China imposed 15 percent and 10 percent tariffs on US imports in April and September last year, respectively, in response to an earlier US move to slap steep tariffs on Chinese products.

In an escalation of the trade tensions, Washington on May 10 increased additional tariffs on US$200 billion worth of Chinese imports from 10 percent to 25 percent and has threatened to raise tariffs on more Chinese imports. In response, China raised additional tariffs on a range of US imports on June 1.

“Overall the US wines have seen a very positive perspective in China. Often times, we are seen as being expensive but quality driven,” he said. “I think Chinese consumers would love to get their hands on more California wines.”

However, each additional round of tariff has made it “more and more difficult” for California wines to compete in “the fastest-growing wine market in the world,” Robert Koch, president and CEO of Wine Institute, said.

For every bottle of Wente Wine that has been depleted on the shelf in China, there are dozens of wine producing countries that are competing for that same shelf space, said Parr.


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