China Tariffs Have California Agriculture Waiting For Fallout
LODI (CBS13) — The Chinese government announced Monday it would increase tariffs by up to 25 percent on nearly 130 U.S. products.
It's responding to the U.S. tariffs recently imposed against the Asian country, and now both actions are causing concern for many California businesses with high exports to China.
About 10,000 bottles of zinfandel are on their way to China. The deal between the Shenzhen Wind Industrial Association and the Klinker Brick Winery is helping put Lodi on the map.
"It's an opportunity for us to expand our sales, too and produce more wine, and ship more wine. So, you know it's good all around. Hopefully, the new tariffs won't be too high," said Steven Felten, owner of Klinker Brick Winery.
Five days after a 20-foot container was filled with Klinker Brick's wine, the Chinese government announced it would put tariffs on about $3 billion worth of U.S. imports including frozen pork, certain fruits and nuts including California's almonds and wine.
"It's going to have an effect. Sooner or later, you're going to have to bite the bullet, you know, and let things fall, and so, hopefully, they will negotiate things out, and tariffs won't be too high," he said.
Business professors say China's decision is retaliation against the Trump administration's penalties on imports of steel and aluminum. The tariffs, they say would impact businesses and consumers.
"Consumers will see higher prices for a variety of different products, most likely you will see these effects a little bit later down the road, but there's already some concern of seeing higher prices now," said Lewis Gale, professor of business, University of the Pacific.
The U.S. already has very low tariff rates, and Gale said any increase could cause a reduction in consumption and a decline in production, even fewer sales.
"There is already work going on, among those that are trying to pull back both China and the U.S., going what they call 'tit for tat.' 'You put something on us, we'll put something on you,' trying to pull back because it really doesn't help either economy," he said.
Owners at the winery in Lodi say they are keeping a close eye on the tariffs and hope to continue selling more of its wine to China.