China began to impose a temporary countervailing duty deposit on wine imports from Australia from Friday. China’s Ministry of Commerce said on Thursday (Dec. 10) that the investigating authority preliminarily found that the relevant wine imports originating from Australia were subsidized and decided that from Dec. 11, import operators should provide a temporary countervailing duty deposit when importing the relevant wine originating from Australia, with the rate of the deposit imposed on Australian wine exporters ranging from 6.3% to 6.4%.
At the end of November, the Chinese government had imposed anti-dumping duties on Australian wine at rates ranging from 107.1%-212.1%. An investigation found that imported wine originating in Australia was dumped, said an announcement from China’s Ministry of Commerce.
China’s double anti-dumping investigation into Australian wine exports to China began on Aug. 18. At the end of August, the Chinese Ministry of Commerce decided to conduct a countervailing investigation into wine originating in Australia.
The Australian government and the wine industry deny any unfair competition. Trade Minister Simon Birmingham said China’s decision to impose anti-dumping and countervailing duties on Australian wines was “not well-founded”.
Tony Battaglene, chief executive of the Australian Grape and Wine Association, said the wine industry disputed the subsidy allegations. “We don’t believe it’s well-founded,” he said.
Australia replaced France as China’s largest wine importer in 2019. Wine exports to China accounted for 39 percent of exports in the first nine months of 2020, according to the Australian Wine Authority.
Approximately $1.2 billion in revenue will not be secured by the Australian wine industry as a result of the double anti-tariffs imposed by China; in addition, the country’s wine prices are expected to fall by 28 percent as a result of China-related measures, according to the Agricultural Commodity Report released by the Australian Bureau of Agricultural and Economic Resources Sciences (ABARES). To mitigate losses, the Australian wine industry is attempting to diversify its export channels by launching a global initiative to buy Australian wine through the newly formed Inter-Parliamentary Policy Alliance on China (IPAC).
Australia-China relations have deteriorated since Australia called for an independent international investigation into the source of the New Coronavirus (CCP virus) in May this year. So far, the Chinese Communist Party’s retaliation against Australia has been in full swing, with banned goods involving coal, barley, wine, seafood, sugar, timber, meat and more.
Beijing’s rhetoric regarding the double anti-tariffs imposed by China on the bottles of wine in question originating in Australia is because Australian wine exporters dump and enjoy government subsidies. However, analysts believe that this is clearly politically motivated.
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