China imposed import duties of up to 212 per cent on Australian wine starting Saturday.
This measure was temporary in nature and was aimed at preventing of dumping of subsidised imports of Australian wine, said China’s commerce ministry.
The announced new tariffs will range from 107 per cent to 212 per cent and the latest step further aggravates the already sour trade relations between the two trading partners.
Australian imports including coal, sugar, barley and lobsters have been targeted by China in recent months because of political tensions.
Subsidies are being used to sell Australian wine in the Chinese market compared to the prices of the same product in the home market, officials in China have argued in favour of the new tariffs.
According to Wine Australia, accounting for about 39 per cent of the total experts for the first nine months of 2020, China has turned out to be the biggest export market for Australia’s win.
Anti-dumping Investigations have been carried out by China for more than year now as in which the country examined the allegations that the prices of the Australian wines sold in China were lower than the prices of the same product in Australia.
There was a 13 per cent drop in the shares of Treasury Wine Estates (TWE), one of the world’s biggest winemakers, after the announcement for the new tariffs was made.
Exports to China has been the major contributor to the huge business built by TWE, the maker of Penfolds and Wolf Blass, and according to estimates of analysts the exports of the company to China was worth A$4bn ($3bn) alone after six years of robust growth.
In addition to TWE, the announcement also singled out other Australian winemakers including Casella Wines and Australian Swan Vintage.
The time period of the new import tariffs was not specified by the Chinese commerce ministry.
The Australian government was “extremely disappointed” at the new tariffs, tweeted Australia’s agriculture minister David Littleproud kin reaction to the announcement.
“The Australian government categorically rejects any allegation that our wine producers are dumping product into China,” he said.
“Australian wine is hugely popular both in China and across the globe due to its high quality and we are confident that a full and thorough investigation will confirm this.”
Australian wine will be made unviable and unmarketable in China because of the new tariffs, said Australia’s trade minister Simon Birmingham.
“This is a very distressing time for many hundreds of Australian wine producers, who have built, in good faith, a sound market in China,” he said.
The idea of filing a complaint against China at the World Trade Organisation (WTO) on the issue was floated by Birmingham.
According to experts, the political relations between China and Australia have touched historic laws this year. In April this year, a global inquiry into the origins of the coronavirus was supported by Australia and according to Chinese diplomats, which effectively singled out China as being responsible for the pandemic.
(Adapted from BBC.com)