A US-China trade war would be bad for most people but good for wine drinkers

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With the release of dueling tariff lists in the last 24 hours, China and the US are getting dangerously close to a bona fide trade war. On China’s potential hit list are US-made aircrafts, soybeans, and automobiles, which made up a combined 30% of the $130.4 billion in US exports to China in 2017.

In aggregate, trade wars don’t leave anyone better off. But some people will suffer more than others if China’s tariffs go through. For instance, given that China buys between a half and a third of US soybean exports, Midwestern farmers will be badly hurt if China’s proposed tariffs take effect.

And as with any conflict, there are bound to be people and companies who would benefit from a US-China trade war, too. Here are a few of the unexpected winners who stand to gain if the tariffs take effect.

US wine drinkers – Những người uống rượu ở Mỹ

China just slapped a 15% tariff on the US’s $82 million worth of wine exports (paywall) to China. That loss of demand will, in theory, push down wine prices stateside. (Bourbon-drinkers should be less psyched, however. Though American whiskey now faces a possible 25% duty, China only accounted for 0.5% of US whiskey exports in 2016.)

Canadian cranberry growers – Người trồng việt quất Canada

China’s new 15% tariff on fresh US cranberries was of little concern to US growers – most of whom are in Wisconsin and Massachusetts—because they don’t export a lot of them. Now, however, the Chinese government is mulling a 25% duty on dried cranberries. China’s fast-growing demand for dried cranberries has made it the US’s number-two export destination, after the Netherlands. That’s worrisome news for the US cranberry industry, which is already grappling with a berry glut.

Who will meet the needs of the cranberry-hungry Chinese masses? As the world’s second-biggest producer, Canada is well positioned to step in exporting “marsh apples“ – as they’re sometime known in the Great White North – to China. Meanwhile, if the Chinese Craisin-barrier goes up, Americans can at least look forward to a slightly cheaper Thanksgiving come November.

Latin American soybean farmers – Người trồng đậu tương Mỹ La tinh

Without the US, there are simply not enough soybeans on the planet to meet Chinese demand, said Capital Economics in a recent note. Watch Brazil and Argentina – the second- and (distantly) third-biggest soybean exporters, after the US – cash in if the tariff on US soybeans comes to pass.

Japanese and Mexican pork eaters – Người tiêu dùng thịt lợn ở Nhật Bản và Mexico

China eats more pork than any other country. As surging income growth over the last 20 or so years has buoyed that demand, US pig farmers have benefited handsomely. In 2016, for instance, around 13% of China’s $3.2 billion in pork imports came from the US. New 25% tariffs on American pork will hit farmers hard. But that extra supply will likely push down prices paid by the top buyers of US swine, Japan and Mexico.

Airbus – Hãng Airbus

The Chinese tariffs propose placing a duty of 25% on US aircraft weighing between 15 and 45 metric tons (17 and 50 tons). Though it’s a little unclear, that probably affects Boeing’s 737 jet, a major source of expected profits (its bigger planes wouldn’t face extra duties).

China is a huge source of demand for planes. In 2016, nearly three-quarters of the $7.5 billion in aircraft under the category currently at risk of Chinese tariffs came from the US (presumably made by Boeing). Only two companies make planes in the volume China needs: Boeing and its European competitor, Airbus.

Source: https://qz.com/1244938/a-us-china-trade-war-would-be-good-for-airbus-and-american-wine-drinkers/

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