2020 Chinese tariffs hit Australian exports

Tariffs of up to 218% hit Australian winemakers hard

Beginning in 2020, China hit a range of Australian exports with new tariffs and bans in the guise of “anti-dumping” and quality control measures. The Chinese tariffs caused hardship across a range of sectors including the wine, barley, meat and rock lobster industries. Other commodities such as coal and cotton were also affected. Since China had previously accounted for more than 25 per cent of Australia’s exports the new tariffs hit exporters hard.

In 2015, a free trade agreement had been negotiated with China which would see the progressive elimination of tariffs on a range of Australian products. Tariffs on wine were dropped completely in 2019. But the spread of the COVID-19 virus which originated in Wuhan, China, in 2019 changed everything. Australians began avoiding Chinese restaurants and there were talks of boycotting Chinese goods. Then, in April 2020, the Australian Government, led by Scott Morrison, supported calls for an investigation into the pandemic’s origin. Relationships with our biggest trading partner rapidly soured.

Accusing Australia of “panda bashing” and “adventurism”,  in May 2020, China introduced an 80% tariff on barley, bringing trade in the commodity to a standstill. This was followed by an alleged anti-dumping inquiry into wine, and the blacklisting of Australian rock lobsters and many major Australian meatworks.

Wine producers were particularly hard hit. In March 2021, China doubled down on import restrictions, imposing a five-year tariff of up to 218 per cent for Australian bottled wine. At the time, the country accounted for some 40 per cent of wine exports, with a value of around $1.2 billion annually. Many winemakers had tailored their production to the Chinese market and its preference for “big” red wines, planting extra acreage of varieties such as cabernet sauvignon, shiraz and merlot. Wine producers such as Treasury Wine Estates, the makers of Penfolds Grange, were forced to adopt a range of strategies including exploring new markets.

With the change of government in Australia in 2022, relationships with China began to thaw, culminating in a visit by Prime Minister Anthony Albanese to Beijing in 2023.  In August of that year, the imposts on barley were removed and, by the end of the year, there was an agreement to review the Chinese tariffs on wine. Tasmania’s rock lobster fishers, however, were still waiting for a reprieve.

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