China threatens EU wine tariffs
China is waving a broken wine bottle in international negotiations: in retaliation for EU tariffs of 11.8% against Chinese solar panels, Chinese authorities have threatened to place trade barriers on EU wine. The EU alleges that China dumps solar panels below the cost of manufacture and China alleges the same thing for EU wine, pointing to subsidies to the industry. See this Reuters account for details.
But who really stands to lose, European wine producers or Chinese consumers who have acquired a taste for European wines? Well, surely the Lafite crowd in mainland China won’t be crying into their Riedel stemware as they could likely afford to pay any new duties. (Notably, wine coming into Hong Kong would still be exempt.) But it could shift Chinese consumption to other parts of the wine world, such as Australia or the US. Or maybe it would spur interest in domestic wines from China. Or maybe it would snuff out their newly stoked interest in wine. There are always unintended consequences in trade wars.
And, more often than not, tough talk is just a bargaining tactic.
On June 5th, 2013 at 5:56 pm ,Philippe Newlin wrote:
Brussels will cave as they did in 1992 with the US. The pitchforks are already pretty sharp given the ongoing deterioration in the community economies. I dont think they want to give’em yet another reason to take to the Streets as the weather warms up…