When two world economic giants come into conflict … who wins?
Until last year, America ranks 1st in terms of exporting wine to China and earnings reached a total of US$75.6 million, the highest in years!
But the recent retaliatory tariff introduced by the Chinese government to the Trump administration has consequently diminish American wineries’ hope of expanding their branches into China.
In this case, a quite normal thing to happen is to have other winners coming up with fresh forces!
This is also the case for Chile, China’s third biggest source for wine. Last year they signed a Free Trade Agreement, and China has surpassed the US to become Chile’s most important export market.
At the moment, American wines entering China are subject to a total of close to 68% taxes now including 25% import tariffs, consumption tax and VAT, while Chilean wines has been enjoying zero import tariffs since 2015, thanks to the two countries’ FTA.
Chile currently ranks as China’s third biggest source for wine after France and Australia, taking up about 24% of market share, according to customs data.
Australia is another country that is likely to cash in on American’s loss in China. However, with the recent political friction between the two countries, there are still uncertainties hanging over the two countries’ trade.
Source: The Drinking Business