China-US Trade Tensions: Australian wine industry sees opportunity

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Most economists agree no side will win in a trade war between the US and China. But some Australia industries are well-positioned to expand business with China if their American counterparts are slapped with higher tariffs. Greg Navarro has more.

On most days in Australia's Hunter Valley, you'll find Chinese visitors included in the stream off traffic meandering through the picturesque countryside. It's not surprising when you consider what the makers of the area's prized asset have done to attract the market.

BRUCE TYRRELL GENERAL MANAGER, TYRRELL'S WINES "We have a young lady who works here who speaks fluent Mandarin and we are not the only people in the district."

Australia's wine industry is also seeing the fruits of its marketing efforts in China, which include an increasing number of Chinese visitors.

JOHN DRAYTON MANAGER, DRAYTON'S WINES "We also try to understand what they want in a wine as well."

And a boost in Chinese investment in Australian wineries.

GRAG NAVARRO HUNTER VALLEY "In fact, it's estimated that half of all foreign interest in vineyard sales across the country come from China."

But the real winner here is Australian wine exports to China, which have grown dramatically. Last year alone, exports increased by more than 60%.

JOHN DRAYTON MANAGER, DRAYTON'S WINES "It is a huge phenomenal figure and the Chinese consumer is starting to drink the higher quality wines as well and the price from the Australian point of view is starting to climb as well."

Australia's wine industry is among several of the country's export sectors, including fruit and nuts, that stands to gain an even larger share of the Chinese market if a tariff-driven trade war escalates between the US and China.

PROF. TIM HARCOURT, ECONOMIST UNIVERSITY OF NEW SOUTH WALES "I think in some ways the erratic nature of the US under the Trump administration makes Australia a very stable and reliable trading partner for China, for Japan, for South Korea so in some ways this sable rattling over tariffs could be quite good for Australia."

While tariffs on US wine exports could go up, tariffs on Australian wine exports to China have been falling thanks to the Free Trade Agreement between the two countries.

BRUCE TYRRELL GENERAL MANAGER, TYRRELL'S WINES "From 2015 to the end of this year, the 14% import tariff on Australian wine is disappearing. We're paying 2.8% at the moment and as of the first of January 2019, it's gone."

Most wine makers here say they don't want to see a trade war escalate. They're also well aware of what their industry stands to gain if it does happen. Greg Navarro, CGTN, Hunter Valley.