Australian wine hit by another heavy fine as China retaliation not over

As the political confrontation between China and Australia continues, China continues to expand its sanctions against Australia despite warnings from the United States. China’s Ministry of Commerce announced on Friday (March 26) its formal decision to impose high tariffs on Australian wine.

The Chinese Ministry of Commerce said in the Announcement on the Final Determination of Countervailing Investigation on Import-Related Wines Originated from Australia that the investigation preliminarily found that subsidies existed on imported related wines originating from Australia and that the domestic related wine industry was materially harmed. With the consent of the Tariff Commission of the State Council of China, the Ministry of Commerce decided to impose anti-dumping duties on Australian wine.

However, in order to avoid double taxation, it was decided not to impose countervailing duties on imported wine originating from Australia, the Chinese Ministry of Commerce said.

The decision on anti-dumping duties became effective on March 28 and will last for five years. The punitive tariffs range from 116.2% to 218.4%.

The tariff rate for Australia’s largest wine producer, Treasury Wine Estates Vintners Limited, was increased to 175.6 percent.

China is an importer of Australian wine and imported a total of $1 billion worth of Australian wine in 2019.

China imposed temporary tariffs on Australian wine last year during an anti-dumping tariff investigation, claiming that the country’s exporters were not only receiving subsidies but dumping into China at prices below their production costs.

The Australian wine industry and the Australian government have objected to the Chinese approach, saying they will file a lawsuit at the WTO over China’s decision.

Responding to the Chinese Ministry of Commerce’s decision, Tony Battaglene, chief executive of the Australian Grape and Wine Association, said Friday, “I think we would recommend that the issue be taken to the WTO.”

According to Australian Broadcasting Corporation (ABC), Battaglene said that once the tariffs were determined, Australia could then take its complaint to the WTO. Australian Broadcasting quoted Bartaglie as saying, “It seems to us that China has been touting how important the WTO is. It’s only natural then that we should make a careful assessment of the possibility of a related challenge through that organization.”

China’s announcement of this decision follows almost a full year of unilateral retaliatory actions against Australia involving barley, beef, wine, seafood, coal, ore and many other exports.

Each Time China announced sanctions actions, it firmly stated that the punitive measures in question were based purely on technical reasons such as product quality, government subsidies and product dumping, rather than retaliatory actions due to tensions between the two countries.

However, in the recent period of heightened confrontation between the U.S. and China, Chinese official media and scholars have stopped being secretive about this and have openly admitted that the sanctions against Australia are intended to “make an example of” countries that follow the U.S. in its confrontation with China.

Australia-China relations have been friendly in the past, although there have been occasional conflicts or disagreements. The turning point came in April 2020, when Australian Prime Minister Morrison called for an independent international investigation into the source of the new crown virus. At the time, it was widely believed that the global virus pandemic began in Wuhan, China, and that the source of the virus was most likely to be there.

Morrison’s call struck the most sensitive nerve in Beijing. Observers said there were many indications that at the beginning of the outbreak in Wuhan, many levels of Chinese government were slow to respond to the outbreak, concealing it from the public, and authorities destroyed important virus information, even as they watched large numbers of infected people leave the country and leave the world in ruins.

Shortly after retaliating against Australia, Beijing launched a protracted campaign of blaming other countries, successively citing the United States, Italy, Spain, Iran, the Netherlands and other countries as the source of the virus, and later claiming that imported cold-chain Food was the main vector for the spread of the virus.

The Biden administration has repeatedly told China since it took office that ending retaliation against Australia is a prerequisite for better U.S.-China relations. Kurt Campbell, the White House National Security Council’s Indo-Pacific coordinator, told the media in mid-March that the United States “will not leave Australia alone.”

Campbell said, “We’ve made it clear that the United States is not prepared to improve the bilateral relationship or to deal with it alone while a close ally is under some form of economic coercion.”