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In the News

Protectionism - South African winemakers toast China demand boom

Graham Watson

10th February 2021

Protectionism often creates opportunities for countries outside the immediate realm of a trade dispute.

It seems that the China-Australia trade war has created opportunities for South African winemakers to exploit the situation - with South African wine exports jumping 50% in the last three months.

However, this isn't welfare enhancing - the tariffs act in a trade diversionary fashion - the Chinese preference isn't for South African wines, they are a second-best solution and the welfare of Chinese consumers is still lower than would have been the case if the tariffs didn't exist.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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