The U.S. wine export value declined by nearly five percent last year as trade relations with important wine markets continue to be strained. The $1.47 billion in wine exports was the lowest value since 2012. Figures from the Wine Institute also showed that overall export volume declined by 1.2 percent in 2018, to just under 42 million cases. Exchange rate differences and competition from other wine producing countries also contributed to the decline in U.S. wine export value.
The current trade relationship with China was one of the main contributing factors in the overall decrease, as China represents the fifth-largest export market for American wines and experienced a decline of 25 percent last year. Competition from other winemaking countries has increased as a result, with countries such as Australia having tax and tariff rates that are less than half of the 79 percent levied on U.S. wines. Australia will also not be paying any tariffs by 2021 on products headed to Japan, the fourth-largest export market for American wines, as part of the Trans-Pacific Partnership.
Despite the overall decline, there were some areas that experienced growth. The third-largest market, Hong Kong, increased ten percent in export value in 2018. Exports to Canada also saw a modest increase in value. Industry groups will continue to work toward better access to foreign markets for U.S. wines which is particularly important to California, as the state is responsible for 90 percent of all wine exports, increasing nearly 60 percent over the past ten years.
“We have made critical progress on trade agreements with the UK, Mexico, and Canada, and we continue to advocate for wine tariff elimination in key markets including China and Japan,” Wine Institute Vice President of Federal and International Public Policy, Charles Jefferson said in a news release. “Wine Institute will continue fighting for a level playing field and the removal of trade barriers in markets around the world.”