In the News
Protectionism - South African winemakers toast China demand boom
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.