Donald Trump's 10% tariff on Chinese goods could have a devastating impact on the prices of vehicles, machinery, plastics and clothing in months to come. Alcohol? Many are still not quite sure.
China's alcohol market is conservatively valued at $340 billion, positioning it as the single largest consumer worldwide. Locals enjoy Tsingtao beer — which you've probably heard of — and Kweichow Moutai baijiu — which you may not have. It's a gargantuan market with a remarkably insular approach, few brands daring to venture abroad when they have so many billions of dollars to gain at home.
Those who have attempted to make the journey outside China are now met with an existential threat. Below, we'll examine three leading Chinese alcohol categories, attempting to understand what they have to lose (and gain) from the trade war raging across the Pacific Ocean.
Baijiu
Image may be NSFW. Clik here to view.(Photo: Costfoto/NurPhoto via AP Images)
No discussion of Chinese liquor is complete without at least a passing mention of baijiu.
The colorless spirit comes in a variety of regional styles, most of which are distilled using fermented sorghum grain. To categorize it into a single profile would be nearly impossible. Depending on where and who you're asking, you may hear rave reviews of the characteristically funky, fruit-forward "strong aroma baijiu," the herbal "sauce aroma baijiu" the light and floral "Xiao-Qu light aroma baijiu" or the decidedly ominous "medicine aroma baijiu" (though baijiu styles are sorted by aroma, the flavors contained within are equally diverse).
What can't be disputed is baijiu's monolithic cultural presence. The spirit accounts for over 95% of China's liquor consumption. According to research firm Euromonitor, the global baijiu market was worth approximately $167 billion in 2023, more than the total value of whisky, vodka, tequila, gin and rum combined.
Despite its reputation as an economic powerhouse, baijiu has never been a hit with American consumers. And it isn't for a lack of trying.
Every few years, a hodgepodge of journalists attempt to rekindle the baijiu question within the U.S. These headlines invariably point at some seismic boom in popularity sitting just around the corner — one that, year after year, never comes. In 2013, CNBC published an article titled "The Most Popular Alcoholic Drink You've Never Heard Of"; in 2016, the Lubbok Avalanche-Journal penned "Chinese Liquor Baijiu Takes a Shot at the US Cocktail Scene"; last summer, Reuters splashed into the topic with "Chinese Liquor Makers Endeavour to Give Westerners a Taste for Baijiu." Brands like Ming River have courted Americans with English labels and national distribution deals, and there are even a handful of companies rolling out pre-mixed baijiu cocktails.
At this point, it wouldn't be accurate to say American drinkers have never heard of baijiu. Instead, consumers keep hearing about how they've never heard of it. One could imagine this laying the perfect groundwork for an underdog marketing scheme, the kind that established mezcal and fernet as favorites among the trendy hipster crowd in the late 2010s.
But the tipping point has never arrived. Trade Economics reports that China exported just under $60 million worth of "Ethyl Alcohol, Spirits and Liqueurs" to the U.S. in 2024, a substantial portion of which likely comprised baijiu. Even giving it the benefit of the doubt, that $60 million figure is substantially lower than just about every spirits category in America, especially considering the multi-billion-dollar success that baijiu has in its home country.
Anyone holding their breath for baijiu's lucky break in America will have to wait at least another four years. In light of the latest wave of tariffs imposed against China, it's unlikely that the spirit will witness anything other than plateauing sales until a new trade agreement is reached.
Beer
[caption id="attachment_100603" align="aligncenter" width="600"]Image may be NSFW. Clik here to view. (Photo: Nano Calvo / VWPics via AP Images)[/caption]
Ask consumers to name a Chinese beer, and chances are it'll be Tsingtao.
Reportedly the best-selling Chinese beer in America since its introduction stateside in 1972, Tsingtao single-handedly accounts for half of China's national beer exports. It's a bonafide international sensation. Travel to Spain or Hong Kong, and you'll find lime-green Tsingtao ads wrapped onto buses; walk into a Chinese restaurant, and chances are the beer is available at a moment's notice.
Another popular Chinese name, Snow Breweries, has recently attempted to muscle in on the market. While Tsingtao reigns supreme among international consumers, Snow is the most popular beer of choice for drinkers in China. By all accounts, this makes it the best-selling beer brand in the world. That success was recognized in 2018 when Heineken bought a 40% stake in the company, paving the way for a worldwide push that has now come to fruition. As of last year, consumers in America can purchase Snow Breweries' flagship products like "Brave the World" and "Classic Snow Beer" at grocery stores across the country. Keep an eye out for its dark blue label and Coors Light-esque mountain logo.
Other popular Chinese beer brands in the U.S. include Zhujiang, a state-owned enterprise founded in 1985, and Yanjing, the official beer of state banquets at the Great Hall of People in Beijing.
According to the Beer Institute, an organization that tracks figures alongside the U.S. Department of Commerce, Mainland China exported 1,281,245 gallons of beer to the U.S. in 2024. That figure positions China as the nation's 16th-largest beer exporter, far behind leaders like the Netherlands (110,658,332 gallons annually) and Mexico (an astounding 1,069,205,277 gallons annually).
Whether or not tariffs can disrupt the status quo is yet unclear. Unlike baijiu, which lacks a foothold in the American market, brands like Tsingtao and Snow Beer are household names with their fair share of die-hard fans.
Whisky, Cognac and International Interest
[caption id="attachment_100671" align="aligncenter" width="600"]Image may be NSFW. Clik here to view. (Photo: Pernod Ricard)[/caption]
Despite a baijiu-sized hurdle in the market, international liquor companies are working fast to court Chinese consumers.
At the end of 2021, French spirits firm Pernod Ricard unveiled what it claimed to be China's first whisky distillery. The facility, constructed near the Emei mountain of the Sichuan province, was a sign of big changes to come. Its opening was accompanied by platitudes over "China's dynamic development" and the "burgeoning enthusiasm" of local consumers — vague indications that conglomerates were about to arrive in the country en masse.
Last November, British firm Diageo got in on the action with the announcement of a nine-year, $120 million investment in the YúnTuò single malt distillery. Less than a month later, Camus Cognac partnered with baijiu brand Gujinggong to distill "the world's most aromatic whiskies" in Bozhou. A source from Pernod told Reuters that there are now 30 to 50 whisky distilleries in the country, most of which are still under construction.
These are the distilleries that stand to gain the most in the event of a trade war, whether intentionally or not.
As the Trump administration implements tariffs on Chinese imports, so too does Beijing place tariffs on American goods. The fallout of these tit-for-tats has already become abundantly clear in the case of the E.U. A long-unwinding dispute between European and Chinese authorities recently resulted in hefty tariffs on European brandy, positioning cognac as their main casualty. The move precipitated protests across the country and losses for some of France's biggest liquor producers. Hennessy briefly floated a plan to bottle its cognac locally in China to avoid the tariffs, though the scheme was quickly ditched due to pushback.
Chinese consumers aren't going anywhere anytime soon. If tariff spats escalate to the point where trade is untenable, liquor brands will be more than happy to pick up their bags and move into China. Many already have and many more almost certainly will. Paradoxically, Trump's tariffs — intended to protect American economic interests — may have the outcome of buoying Chinese production of whiskey, cognac and other liquors to never-before-seen heights.
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(Photo: Nano Calvo / VWPics via AP Images)[/caption]
Ask consumers to name a Chinese beer, and chances are it'll be Tsingtao.
Reportedly the best-selling Chinese beer in America since its introduction stateside in 1972, Tsingtao single-handedly accounts for half of China's national beer exports. It's a bonafide international sensation. Travel to Spain or Hong Kong, and you'll find lime-green Tsingtao ads wrapped onto buses; walk into a Chinese restaurant, and chances are the beer is available at a moment's notice.
Another popular Chinese name, Snow Breweries, has recently attempted to muscle in on the market. While Tsingtao reigns supreme among international consumers, Snow is the most popular beer of choice for drinkers in China. By all accounts, this makes it the best-selling beer brand in the world. That success was recognized in 2018 when Heineken bought a 40% stake in the company, paving the way for a worldwide push that has now come to fruition. As of last year, consumers in America can purchase Snow Breweries' flagship products like "Brave the World" and "Classic Snow Beer" at grocery stores across the country. Keep an eye out for its dark blue label and Coors Light-esque mountain logo.
Other popular Chinese beer brands in the U.S. include Zhujiang, a state-owned enterprise founded in 1985, and Yanjing, the official beer of state banquets at the Great Hall of People in Beijing.
According to the Beer Institute, an organization that tracks figures alongside the U.S. Department of Commerce, Mainland China exported 1,281,245 gallons of beer to the U.S. in 2024. That figure positions China as the nation's 16th-largest beer exporter, far behind leaders like the Netherlands (110,658,332 gallons annually) and Mexico (an astounding 1,069,205,277 gallons annually).
Whether or not tariffs can disrupt the status quo is yet unclear. Unlike baijiu, which lacks a foothold in the American market, brands like Tsingtao and Snow Beer are household names with their fair share of die-hard fans.
(Photo: Pernod Ricard)[/caption]
Despite a baijiu-sized hurdle in the market, international liquor companies are working fast to court Chinese consumers.
At the end of 2021, French spirits firm Pernod Ricard unveiled what it claimed to be China's first whisky distillery. The facility, constructed near the Emei mountain of the Sichuan province, was a sign of big changes to come. Its opening was accompanied by platitudes over "China's dynamic development" and the "burgeoning enthusiasm" of local consumers — vague indications that conglomerates were about to arrive in the country en masse.
Last November, British firm Diageo got in on the action with the announcement of a nine-year, $120 million investment in the YúnTuò single malt distillery. Less than a month later, Camus Cognac partnered with baijiu brand Gujinggong to distill "the world's most aromatic whiskies" in Bozhou. A source from Pernod told Reuters that there are now 30 to 50 whisky distilleries in the country, most of which are still under construction.
These are the distilleries that stand to gain the most in the event of a trade war, whether intentionally or not.
As the Trump administration implements tariffs on Chinese imports, so too does Beijing place tariffs on American goods. The fallout of these tit-for-tats has already become abundantly clear in the case of the E.U. A long-unwinding dispute between European and Chinese authorities recently resulted in hefty tariffs on European brandy, positioning cognac as their main casualty. The move precipitated protests across the country and losses for some of France's biggest liquor producers. Hennessy briefly floated a plan to bottle its cognac locally in China to avoid the tariffs, though the scheme was quickly ditched due to pushback.
Chinese consumers aren't going anywhere anytime soon. If tariff spats escalate to the point where trade is untenable, liquor brands will be more than happy to pick up their bags and move into China. Many already have and many more almost certainly will. Paradoxically, Trump's tariffs — intended to protect American economic interests — may have the outcome of buoying Chinese production of whiskey, cognac and other liquors to never-before-seen heights.
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