China Finds California Wine Pairs Well With a Trade War

Date: Wednesday, April 4, 2018
Source: NYT

Cabernet isn’t the most obvious pawn in a trade war between the United States and China. Airplanes and their parts are the leading American export to China. Soybeans and wheat grow in Trump country.

But China’s selection of wine as a target of retaliatory tariffs did not surprise Michael Honig, a winemaker in the Napa Valley, where the tariff would hit hardest.

“The reason the government realizes they should penalize us is, we are branded,” said Mr. Honig, the president of Honig Vineyard and Winery. “It’s hard to go after a wheat grower, because who is a wheat grower? It’s a commodity. We are not a commodity.”

The news was an unwelcome turn of events for Mr. Honig and many California winemakers, who have spent years trying to carve out a place in the hearts of wealthy Chinese consumers. That hard work has earned them a prized sliver of what is becoming one of the fastest-growing markets for wine imports.

China’s imports of American wine reached $82 million last year — not including bottles entering duty-free through Hong Kong — a sevenfold increase in the last decade. But growing visibility may have turned Napa wine into easy prey.

“Wine is something people can relate to,” said Jim Boyce, who has been covering the industry from Beijing for a decade on his blog, the Grape Wall of China. “It’s like putting a tariff on Chinese dumplings. It’s something you can feel on an emotional and personal level.”

The 15 percent tariff, announced Monday, on top of existing tariffs and taxes, is a gut punch to winemakers marketing their wares to the mushrooming legions of young, recently wealthy Chinese.

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