California Wine Producers Could Lose Ground In China Market With Another Tariff Hike

U.S. wines are facing another tariff hike from China that will place a 91 percent tax on imports starting June 1.

Ninety percent of those wines are coming from California.

Wine exports from the United States to China fell by almost 25 percent due to the tariffs imposed last year.

China is the sixth largest importer of American wines. Canada is the top market, followed by the European Union and England.

But the Chinese market for California wines has grown over 450 percent in the last decade.

Stuart Spencer with the Lodi Winegrape Commission says it’s a market that may lose ground because of the tariffs.

“The concern is that other countries are going to take the market share back from California and thus make it difficult to regain that position once this tariff situation gets resolved,” he said.

Spencer says another problem is that most California wineries use bottles made in China, which are subject to tariffs here and end up raising production costs.

“The environmental regulations and cost of producing glass in California has shifted in production to China over the last 20 years,” he said. “And so, I think all wineries, regardless of size, are being affected by this as the cost of the glass continues to rise.”

Stuart says it’s likely those costs are absorbed by the wineries, which cuts into profits.