Could the new Labor Government herald better days for Treasury Wine shares?

Prime minister Anthony Albanese has taken staunch stance against Chinese tariffs.

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A group of people clink wine glasses in an outdoor, late afternoon setting to celebrate the rising Treasury Wine share price

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Key points

  • Treasury Wine shareholders' hopes might have been raised after Australia's new Prime Minister slammed Chinese tariffs on Australian goods 
  • The winemaker was hit hard when such tariffs were introduced in 2020. Prior to their introduction, Chinese sales accounted for 30% of the company's earnings 
  • Prime Minister Anthony Albanese told press that China's trade sanctions are unjustified and should be removed to improve relations between the two nations 

Treasury Wine Estates Ltd (ASX: TWE) shares have suffered against Chinese tariffs in recent years. The company has even decided to produce its famous Penfolds wine in the nation to avoid them.

But could Chinese sanctions change alongside Australia's government?

Newly elected Prime Minister Anthony Albanese apparently won't be letting such trade bans slide, slamming Chinese tariffs on Australian goods at this week's Quad meeting.

At the time of writing, the Treasury Wine share price is 1% higher than its previous close.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is boasting a 0.78% gain.

Let's take a closer look at what Albanese's latest comments might mean for Treasury Wine shares.

Albanese slams Chinese tariffs

Treasury Wine shares could be in for a good run if Albanese sticks to his staunch stance against Chinese trade bans.

The Chinese Ministry of Commerce slapped Treasury Wine's products with a massive duty rate back in 2020.

Prior to the hike, China accounted for around 30% of all Treasury Wine's earnings. Their implementation understandably devastated the company's bottom line.

Now, Australia's new Labor Government's apparent push against such tariffs could bring brighter days for the Treasury Wine shares.

Albanese slammed Chinese trade sanctions this week, saying the country should drop tariffs on Australian goods to improve the relationship between the two nations.

The comments came after Chinese Premier Li Keqiang sent a letter congratulating Albanese on his election win.

"The Chinese side is ready to work with the Australian side … to promote the sound and steady growth of the China-Australia comprehensive strategic partnership," the letter stated.

But the olive branch wasn't accepted unconditionally by Australia's new leader. Speaking to press in Tokyo, Albanese said:

Australia seeks good relations with all countries. But it's not Australia that's changed, China has.

It is China that has placed sanctions on Australia. There is no justification for doing that. And that's why they should be removed.

Treasury Wine share price snapshot

The Treasury Wine share price has suffered through 2022 so far. Though, things might not be as bad as they seem.

While the company's stock has tumbled 6% year to date, it's trading relatively in line with the broader market. Right now, the ASX 200 is 5% lower than it was at the start of 2022.

Additionally, the winemaker's stock has outperformed the index over the last 12 months, gaining around 3% against the ASX 200's 1% rise.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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