The U.S.-China tariffs dispute is impacting part of California’s wine industry — glass bottles, as the wineries are sourcing glass from new manufacturers to control costs, Xinhua reported.
“The glass from China has jumped up in price due to tariffs. Our production team is right now sourcing glass from other countries,” said Michael Parr, vice president of Wente Family Estates in Livermore, Northern California.
“We are going to walk away from glass manufacturers in China and looking now to other countries or in the Unites States,” said Parr, who manages the international business for the oldest family-owned winery in California.
He said other wineries also are doing the same thing: canceling glass orders from China and trying to find other glass producers locally or from Mexico, the report said.
In an escalation of the trade tensions, Washington increased additional tariffs on US$200 billion worth of Chinese imports from 10 percent to 25 percent, and has threatened to raise tariffs on more Chinese imports. In response, China raised additional tariffs on a range of U.S. imports.
Most California wineries use bottles made in China, which are subject to tariffs from the United States and end up raising production costs, Stuart Spencer, executive director of Lodi Winegrape Commission, told Capital Public Radio.
“The environmental regulations and cost of producing glass in California has shifted in production to China over the last 20 years,” he told the media outlet. “And so, I think all wineries, regardless of size, are being affected by this as the cost of the glass continues to rise.”
California makes 81% of all U.S. wine and is the world’s 4th leading wine producer after France, Italy and Spain.
On the other hand, California’s wine industry has lost revenues in the Chinese market because of the retaliatory tariffs from China. U.S. wines now face 93 percent in tax and tariff rates.
Meanwhile, wines from Australia, New Zealand and Chile face no tariffs in China and have gained market share.