NEWS
4TH TARIFF HIT: U.S. WINES TO FACE 118% TAX IN CHINA FROM 15 DECEMBER
By Siulan Law Mathews DipWSET
26-8-2019
American wine producers will be hit again as China announced retaliatory tariffs on USD75billion worth of American goods. The new 10% punitive tariffs on wines and spirits will be effective from 15 December, bringing total tax bill for imported American wines in China to more than 118%.
Beijing announced its retaliatory tariffs last week as a response to President Trump’s punitive tariffs on USD300b worth of Chinese goods announced on 15 August.
China’s Ministry of Finance published two lists of affected goods last Friday. Included on the lists are 5078 items like cars, auto parts, agricultural and other products. Punitive tariffs ranging from 5% to 10% will become effective in two stages, one started on 1 September, the other on 15 December.
Among these items are wine, beer, gin, agave and other distilled spirits, a retaliatory tariff of 10% on these products will be levied on 15 December.
This will be the fourth round of tariff increase faced by American wine producers when exporting to China, the last round kicked-in on 1 June when China added 15% tariff on US wine imports.
That was on top of a previous 15% tariff increase implemented in April 2018 and another 10% increase in September 2018.
When compounded, the new total tax and tariff rate to be faced by American producers on 15 December when exporting to China will 118.47%.
The pro-longed trade war has already taken its toll on American wine export to China. The trade declined by a whopping 25% by value to USD59 million last year.
There is no sign it will recover soon in this on-going trade war between the world’s two biggest economies.
Soon after China announced its retaliatory measures last week, President Trump announced on Twitter that he would be raising tariffs on a further USD550b worth of goods coming from China.
The biggest shock from his statement was that he said he could order American companies to leave China and that he was ordering them to “immediately start looking for an alternative to China.”
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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