Drum It Up! Steel Drum Industry News, Trends, and Issues

Wine Wars

July 16th, 2019 by Jon Stein

Filed under: Skolnik Newsletter, Wine

In the escalating trade war that threatens the world economy, wine is a minor skirmish at most. But it has its own list of casualties — especially vineyards in the U.S., and drinkers in China with a taste for their product. Writing in the Bloomberg newsletter, “Terms of Trade”, Ryan Haar writes: “U.S. President Donald Trump has raged at Europeans for taxing American wine out of their markets. Chinese tariffs have sent the price of a Californian red soaring in Beijing. Even the apparently unrelated question of Boeing’s competition with Airbus could have fallout for wine-drinkers who, in various parts of the world, have had to get used to higher prices.” Here’s a roundup of wine-trade news:

China

China has slapped three rounds of tariffs on American wine in little more than a year, with the latest one coming into effect at the start of June, according to the Wine Institute, an advocacy group for Californian producers. That’s having a sharp impact on prices in what’s become the fastest-growing major wine market in the world. Honig Vineyard & Winery, based in Napa, California, has been exporting to China since 2007. Before the trade war escalated in 2018, “a bottle of the Cabernet would cost around $50 in our tasting room and about $70 in China,” says Stephanie Honig, director of communications and exports. Three rounds of tariffs later, the Beijing price has gone up to $170 — assuming you can find it. Honig, which exported 1,000 cases to China in 2016, says the number fell to zero last year. The wine industry in California has taken “terrific hits,” Mike Thompson, a congressman from the state, told U.S. Trade Representative Robert Lighthizer in a House hearing this month. “We are at a disadvantage when competitors are paying zero percent.”

Europe

Ryan Haar goes on to write that: “Trump isn’t at all happy about the terms of American wine trade with Europe, where the world’s biggest exporters are found — and he’s been stepping up his complaints since November. Trump’s threat to retaliate with matching U.S. tariffs also forms part of a much bigger trade argument: the one involving plane-makers Boeing and Airbus. As the dispute escalates, both the U.S. and Europe have drawn up lists of goods that they’ll target with tariffs, and wine is on the American version.” “The only linkage alcohol has with planes is that it’s served on planes,” said Robert Tobiassen, President of the National Association of Beverage Importers. “This injures consumers.”

Here at Skolnik Industries, we buy domestic carbon and stainless steel, and carefully monitor the growing impact of the tariffs. Note that our stainless steel wine barrels are reusable, easy to clean, and recyclable at the end of their service life. Check out the full line of our Stainless Steel Wine Drums here.

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