U.S. Wine Soars to Highest Cost Due to Additional Tariff
With the ongoing and intensified trade war between the United States and China, effective June 1, 2019, China will impose an additional 25% customs tariff on U.S. wines, which will make the total incidental costs soared to the highest, and makes the U.S. wines less favorable to the Chinese consumers.
* Aggregate tax includes 10% excise tax (a.k.a. consumption tax) and 13% value-added tax besides the customs tariff.
For bulk wine and large-size bottled wine (capacity > 2 liters) from the United States, the new customs tariff will be 70% (standard tariff is 20%), and the aggregate tax will be levied at 133.44% (standard aggregate tax rate is 50.66%) based on CIF Chinese harbor price.
This will make the U.S. wine far less competitive in the marketplace, and a severe impact to U.S. wine distributors. Not to mention to wine producing countries who are in “zero” customs tariffs with China, like New Zealand, Chile, Australia and Georgia.