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Trump’s Trade War With China Could Hurt California’s Wine Industry

March 30, 2018, 7:04 PM UTC

Trump Administration’s trade war with China has already sparked fears about its potential impact on the markets for steel and aluminum. But the battle could also have a serious impact in an unexpected place: California’s wine country.

During his time in office, President Obama held a dinner for China’s president in Geyserville, Calif., where wine from the area was served. The dinner spurred an interest in California wine in the Chinese market, causing wine exports to China from the area to grow rapidly, reports CBS San Francisco.

In 2017, wine exports from the U.S. to China were reportedly worth $210 million.

In response to Trump’s tariffs on steel and aluminum, China is considering increasing tariffs on a number of U.S. imports, including a 15% tax on wine. California wines are already being sold at a 40% to 45% markup in China, and additional 15% could negatively impact sales.

Wine was just one of 128 products China listed as targets for potential retaliatory tariffs. Exports currently only account for 5% of overall U.S. wine sales, according to the BBC.