As we now know, Trump and tariffs are important to what happens to our stock market. Good news on a potential trade deal to be announced soon, has taken share prices up on Wall Street, so it’s more than likely that we’ll all get wealthier today via our super funds, as our market here rises. But don’t forget this: like it or not, China is our main economic game. And this $1 billion worth of wine sales to our biggest export customer underlines my point.

Ironically, this good news for our winemakers and exporters has followed China scrapping its tariff on our wine, but it’s not all good news because overall, the global consumption of ‘the nectar of the gods and the grape’ is on the slide!

The Daily Telegraph’s wine watcher, Giuseppi Tauriello, reports that “Australian wine exports increased by 41 per cent to $2.64bn in the 12 months to March, according to the latest figures from Wine Australia, fuelled by $1.03bn in sales to China, which has re-emerged as the dominant export market.”

He added: “Exports to China peaked at $1.2bn before tariffs of up to 218 per cent were slapped on Australian wine in March 2021.”

While the latest figures show a swift rebound for Australian wine producers, Wine Australia market insights manager, Peter Bailey, warned most of the demand out of China was focused on the premium end of the market.

While numbers look good on an historical basis, the Chinese are buying top end wine (such as Penfold’s Grange), which has pushed up the value of exports, volumes are down for total exports. The actual volume is 23% lower than the five year average.

“Additionally, the average value of packaged wine shipped to mainland China was $23 per litre, much higher than any other major export market. The lower volume and high average value demonstrate that mainland China is a premium market for Australian wine and will therefore not solve oversupply issues in Australia.”

The big problem for our wine exporters is in the marketplace outside of China, where the value exports dropped by 13% to a 10-year low of $1.62 billion, while export volumes away from China were down 9% to 551 million litres – the lowest level in more than 20 years.

The numbers show:

1. Exports to the UK were down 3% to $353 million.
2. The US bought $323 million of our wine, down 9%.
3. Hong Kong imported $154 million of our wine down 47%.

Some of this can be explained because the UK has been in a serious economic slowdown after successive interest rate rises and leaving the EU.

While Hong Kong’s lower consumption would have been linked to Beijing’s tariff, the US slide in wine consumption could reflect two issues. First, the Americans have been tightening their belts because of big interest rate rises and second, there is a wellness trend that’s not good for winemakers and other death-threatening joys of life!

Our exports to the US are at low levels not seen since the early 2000s and President Trump’s tariff and buy US first mantras aren’t likely to help, so winemakers should pray for lower interest rates, a global economic recovery and the Chinese population of 1.42 billion going long wine consumption at all prices!

Wine Australia worries about the timing of all this with a potential trade war ahead, which hopefully could be less intense than what has been thought since Trump’s so-called “Liberation Day”. Overnight, Trump’s Commerce Secretary, Howard Gutnick, hinted at a trade deal with a major trading partner and the stock market lapped it up.

The Dow finished up 300 points (or 0.75%), while the sensitive Nasdaq index, which goes up or down hard on what Trump’s tariff team say, was up 0.55%. This tech-heavy index is up over 14% since April 8, when the President started U-turning on tough tariff talk!

The Telegraph tells us that since “the return of the Chinese market has driven an increase in red wine exports, with shiraz and cabernet sauvignon the two most popular varieties. Shiraz exports were up 66 per cent to $595.3m, while exports of cabernet sauvignon were up 59 per cent $560.4m.”

I know Beijing has a lot of problems, making it hard to like what they’re up to with spying, Taiwan and influencing neighbouring countries, but let’s face it, the Yanks aren’t totally without flaws, and their new President plans to stick it to us economically for four years.

The facts are that in 2023 (as our own government report on trade reveals): “China accounted for 32.5% of Australia's total exports, making it the top destination for Australian goods and services. This strong trade relationship has significant implications for the Australian economy, impacting various sectors and contributing to the national income.”

And remember this: “Trade supports a substantial portion of Australia's total economic output, with 31% of GDP directly tied to trade activity.”

Like it or not, we’re stuck with China! And because of the Trump trade goals to “make America great again” (and more selfish!), we’re even more dependent on our Beijing buddies if we want Aussies in work and earning income.

One third of our gross domestic product (GDP) is powerful reason to put up with Beijing’s annoying ways. Here are out top trading partners. But where’s the UK?!

 Australia’s top trading partners

1. Mainland China: US$104.1 billion (30.1% of total US exports)
2. Japan: $31.3 billion (9.1%)
3. South Korea: $19.9 billion (5.7%)
4. India: $15.9 billion (4.6%)
5. United States: $15.4 billion (4.5%)
6. Taiwan: $8.5 billion (2.5%)
7. New Zealand: $8.4 billion (2.4%)
8. Indonesia: $8.1 billion (2.3%)

The UK is number 12 on this list, with Vietnam more important to us. And look at the numbers of China compared to Japan — they’re three times bigger!