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Wine: The punching bag in trade retaliation

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  • Ridley, William
  • Luckstead, Jeff
  • Devadoss, Stephen

Abstract

Wine is an extensively traded product that is a common target for retaliation in trade disputes. We analyze the impact of tariffs and tariff retaliation by estimating a structural gravity model of global wine trade. We then simulate the effects of tariffs and tariff retaliation, as well as the effects of trade liberalization, on trade and welfare in the international market for wine. We show that recent trade disputes threaten to reduce wine trade by nearly $340 million annually and significantly reduce consumer welfare, while complete trade liberalization would expand trade by roughly $76 million.

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  • Ridley, William & Luckstead, Jeff & Devadoss, Stephen, 2022. "Wine: The punching bag in trade retaliation," Food Policy, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:jfpoli:v:109:y:2022:i:c:s030691922200032x
    DOI: 10.1016/j.foodpol.2022.102250
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    More about this item

    Keywords

    Wine trade; Collateral tariffs; Retaliation; Gravity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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