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Teaching Economics

In the News

Protectionism - South African winemakers toast China demand boom

Graham Watson

10th February 2021

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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.

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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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