China may impose sweeping tariffs on Australian wine & ban other imports

Australian industry groups fear they may lose the lucrative Chinese market amid reports that Beijing could slap anti-dumping duties on Australian wine and suspend other imports as relations between the two nations sour.

The Chinese government may impose a duty of more than 200 percent on Australian wine starting next week, the South China Morning Post (SCMP) reported. This would be a painful blow for both Australian wine brands and exporters, as the country is the largest exporter of wine to China.

The news of looming tariffs comes on the heels of reports that Beijing signaled new curbs on a range of Australian exports worth billions of dollars. The restrictions may target shipments of Australian wine, lobsters, sugar, coal, timber, wool, barley and copper.

The anti-dumping probe into Australian wine has been ongoing since August, when the China Alcoholic Drinks Association (CADA) asked to protect the domestic wine industry and to check if imported Australian wines were being sold below “fair” prices. It is believed that the investigation, which was initially set to last for one year, may bring some results as soon as next week, when the government reviews the questionnaires from exporters.

“We really didn't think it would get to this stage,” said Li Wei, CEO of Sydney-based Australian wine exporter and producer Swan Wine Group, as cited by the SCMP.

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The Australian wine export industry’s concerns are growing, as the alleged suspension may take effect on Friday. Swan Wine Group was among many exporters who reportedly received calls from Chinese customers for cancellations or suspensions of wine orders. The CEO says he is very “disappointed” with the developments, but he hopes the Morrison government will manage to revive the bilateral ties that have reached “a freezing point.”

Tensions between Australia and its largest trading partner have been flaring for around three years, after Canberra alleged that there was a growing Chinese influence on its domestic affairs – a claim repeatedly denied by Beijing.

In 2018, the Australian government added fuel to the fire as it banned China’s Huawei and ZTE from the country’s 5G rollout. The most recent escalation happened when Australia pushed for an international inquiry into the origins of the coronavirus outbreak in April.

Another wine exporter told the SCMP that all of her orders had been halted, noting that this ban left industry players “speechless.”

Earlier this week, the chief executive of Australian Grape and Wine, Tony Battaglene, told the Guardian that he had received calls from up to 20 Australian wine exporters. They complained that their Chinese partners had asked them not to expect products clearing through China’s customs from Friday onwards. Battaglene noted that it is unclear if all wine importers in China were subject to such restrictions, or just some of them.

Beijing did not officially confirm any such measures, prompting Canberra to ask for clarification on the potential curbs and tariffs.

“China has consistently denied any targeting of Australia and spoken about its commitment to trade rules,” Trade Minister Simon Birmingham said as cited by media. “In the spirit of their statements, we urge relevant Chinese authorities to address concerns of sectors like the seafood trade to ensure their goods can enter the Chinese market free of disruptions.”

However, the suspension of exports was later reported by state-linked newspaper Global Times. The article, titled “Australia nervous at losing Chinese market,” was considered by some Australian media as confirmation of looming restrictions.

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