As China’s retaliatory tariffs start to hit U.S. farmers, local growers are insulated – mostly.

As the Trump administration’s trade war with China continues to escalate, many American farmers have been caught in the crossfire, and have seen their livelihoods threatened.

To throw those farmers a lifeline, the U.S. Department of Agriculture announced July 24 a $12 billion aid package to offset the estimated $11 billion impact of China’s tariffs on U.S. agricultural goods. As outlined, the program calls for direct payments to farmers for a small set of commodities – like soybeans, corn and wheat – but it leaves out direct payments to farmers of specialty crops, like tree nuts, which are grown largely in California.

A week later, a bipartisan group of 10 California members of Congress, including Rep. Jimmy Panetta, D-Carmel Valley, sent a letter to Agriculture Secretary Sonny Perdue, expressing their hope the administration takes growers of specialty crops into account. The letter also alludes to potential long-term damage to the state’s ag industry.

“Our growers’ highest priority for maintaining market share, which is incredibly difficult to regain if lost, is free and fair trade,” the letter reads.

While all this plays out, however, Monterey County’s $4.4 billion ag industry so far finds itself almost completely unaffected, though it’s not entirely clear it will remain that way.

“It’s a little hard to gauge right now,” says Norm Groot, executive director the Monterey County Farm Bureau. “There’s a lot of confusion about whether it’s going to have an impact locally.”

Based on the county’s export data, Groot’s initial assessment is that it won’t: Of the 424 million pounds of the county’s agricultural products that were exported in 2017, just 282,000 pounds went to China.

“It’s a blip,” Groot says. “That’s probably why I haven’t heard a lot of screaming from local growers.”

But there is one sector of the county’s ag economy where a trickle down might make an impact: wine grape growers, and more specifically, winemakers.

“A lot of individual wineries, especially locally, are reluctant to talk about [the tariffs],” says Kim Stemler, executive director of the Monterey County Vintners & Growers Association. “They just want to sell wine.”

Linsey Gallagher, vice president of international marketing for the Wine Institute – a statewide industry group – expects the tariffs to have an impact on wine exports, but how much is unclear.

In 2017, California exported $79 million of wine to China, where it was already facing a mark-up – through a combination of taxes and tariffs – of about 48 percent. Still, it was the fifth-largest market for the state’s wine exports. That may change: With the new tariffs, that mark-up is now about 66 percent, Gallagher says.

“It makes us much less competitive with other winemaking regions,” Gallagher says, adding that the state’s wine exports to China have increased about 300 percent in the last 10 years.

“We really have built a strong brand and category for California wine in China,” she adds. “We’ve all been investing a lot of time and energy, and had great momentum until [the new tariffs].”

That energy has been put there for a reason: With China’s burgeoning middle class, the industry saw an opportunity. “The reason why there’s so much disappointment around this is because of the potential,” Gallagher says.