Trade talks are going on in Washington, D.C., between China and the U.S. in an effort to avert an all-out trade war. Among those closely watching are California's winemakers.
More visitors come to Napa Valley from China than any other foreign country, and some wineries actively court Chinese customers. Mondavi and Beringer host frequent Mandarin-language tours, and other wineries have menus in Chinese. At the tasting room at Honig Winery in Rutherford, there are Chinese signs, including ads for a door-to-door international delivery service.
On a balcony overlooking his vineyard, Michael Honig points to row upon row of grapes that will eventually become sauvignon blanc and cabernet. Both are among the wines that his winery sends to China.
In the past decade, U.S. wine exports to "greater" China, including Taiwan, rose 450 percent. But last month China slapped a tariff on U.S. wine, and other food and agricultural products, in retaliation for U.S. tariffs on steel and aluminum.
China is now one of the top export destinations for U.S. wine, the vast majority of which comes from California. But, before the latest tariff spat, the combined taxes and tariffs for importing them to China were already more than 48 percent. On top of that, importers, distributors and retailers in China have to make a profit, too, and there are also shipping and warehousing costs. This already means a huge markup.