It’s a dangerous pastime to be making a verdict or calling winners on the back of Donald Trump’s moveable tariff feast on trade, but at first blush, Australia’s largest wine company, Treasury Estate Wines, looks to be a winner.

As part of the escalating retaliatory battle of duties, the Trump administration has announced that a 200 per cent impost will be applied to US alcohol imports from Europe.

It’s a levy size that stops trade in its tracks – too large for producers to absorb or consumers to pay.

Treasury Wine Estates, best known for its ultra-luxury Penfolds brand, produces a large amount of its wine in the US, which accounts for up to 40 per cent of its earnings.

Not only would this production be immune from tariffs, US domestic demand for locally made wines would presumably receive a boost.

Investors have lifted the share price almost 5 per cent since Trump upped the ante on his trade war with Europe on Friday (AEDT).

Thus, Treasury could be a collateral beneficiary of Trump’s tariffs, which would make for a welcome change for the company that five years ago fell victim to a diplomatic spat between Australia and China.

China imposed the wine tariffs and other trade controls in 2020 amid a souring of relations between the two countries over issues of national security and foreign investment, which deteriorated further in 2020 following Canberra’s call for an international inquiry into the origins of the COVID-19 pandemic in China.

No doubt Treasury Wine Estates’ management would be happy to take the win, but it must also revive many of those painful China memories. No one better understands the arbitrary damage that can be imposed on a company that is frozen out of large markets with the stroke of a pen, and the desperate scramble and difficulty attached to building new export markets.

Of course, the caveat that needs to apply in any talk of Trump tariffs is that any announcement appears to be an opening gambit that could be modified or walked back, depending on how negotiations pan out.

Trump’s threat came in response to a European Union plan to impose tariffs on American whiskey and other products next month – which itself is a reaction to Trump’s 25 per cent tariffs on steel and aluminium imports that took effect last Wednesday.

The only certainty in Trump’s newest European tariff policy is that it will be subject to change before it is imposed – now scheduled for two weeks’ time.

One of the particularly unnerving aspects to Trump trade policies is their randomness.

Would anyone be wildly surprised if Trump didn’t impose tariffs on other Australian industries beyond steel and aluminium? Could the US impose a tariff on Australian wine next?

Treasury is pretty well covered in the event of such a move given that it doesn’t export a large amount of wine to the US.

But when the tectonic plates of trade move, there are ripple effects to consider.

For example, would European wine or champagne makers look to other markets such as China to funnel their product at discount prices; if so, will that affect our exports to those markets?

To date, Australian exporters have avoided the brunt of Trump’s tariffs. The imposition of levies on steel and aluminium will barely be felt by our economy given we export a combined $900 million to the US each year.

Australian politicians are making the most of their indignation that we have been dealt with unfairly by the US, but that plays nicely to the public sense of Trump’s betrayal of what we considered to be our close relationship.

Our largest steel producer, BlueScope, is a big US manufacturer and becomes a beneficiary of Trump’s tariff policy, though it now needs to deal with the prospect of China redirecting US sales to other markets such as Australia’s.

Spare a thought for businesses whose markets have been blown up or even expanded by Trump’s erratic policy.

An overnight change in the size of a market is challenging. A company can’t modify production quickly to adjust to changes in demand or a new set of customers.

Playing the Trump trade can be equally risky given the rate of imposition and backflip coming from the US administration.

The sharemarket gyrations of the past week are a testament to the lack of clarity on anything coming from the United States.

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