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After a year steadily deteriorating relations between Beijing and Canberra, China has imposed a series of trade measures blocking billions of dollars in Australian commodities from its largest trading partner.
The restrictions on shipments of beef, barley, coal, lobster, wine, and wood have taken many forms. Some measures are precise, such as anti-dumping and anti-subsidy duties on barley, which allow Australia to do so escalate the matter to the World Trade Organization.
Others, ranging from verbal statements to bans against individual companies, are less clear. For example, on coal, China has not even officially recognized the restrictions, obscuring Canberra’s path to returning to business as usual. Some goods have been blocked due to health and pest problems. China, meanwhile, has repeatedly said it is acting in accordance with the law and international practices.
These are the different ways China has slowed Australian imports:
Coal
China verbally told power plants and steel mills that they should suspend Australian coal imports, according to people familiar with the matter in October, rather than putting it in writing. This creates uncertainty about the duration of the terminations and the possible consequences for existing long-term contracts.
This isn’t the first time China has rejected Australian coal – it targeted imports as far back as January 2019. all foreign purchases including from Down Under.
A report from China’s Global Times on Dec. 13, which has since been removed, suggests Beijing has formalized its shutdown by allowing utility companies to import coal without restrictions, except from Australia.
Prime Minister Scott Morrison said if the report turned out to be correct, it would violation of the free trade agreement signed by China and Australia in 2015. Chinese Foreign Ministry spokesman Wang Wenbin said the government was not aware of the situation when asked about the state media report.
Barley
China has imposed Australian anti-dumping and anti-subsidy tariffs of more than 80% barley for five years from May. The exporter supplies about 40% of China’s overseas purchases of the grain.
Australia said on Wednesday that it will challenge China at the WTO over the barley tariffs. The dispute can last two to three years to be resolved, but the independent arbitrator must recognize that the rates “are not substantiated by facts and evidence,” said Secretary of Commerce Simon Birmingham.
China called Australia’s decision regrettable and added that it will deal with the case in accordance with WTO dispute settlement procedures.
Wine
Another notable target of Beijing’s actions was Australian wine. China will impose anti-dumping and anti-subsidy duties on the drink, which could increase the total amount to more than 218%. The rates are expected to last between four and nine months.
Dump wine?
Australia is China’s largest wine supplier
Source: China General Administration of Customs
Commerce Secretary Birmingham hinted at the possibility of bringing China to the WTO for wine tariffs as well, noting that Beijing’s claims had similar criteria to those about barley. The Chinese Embassy in Canberra said concerns about China’s entry into the FTA “totally unfounded ”and that the nation has fulfilled its obligations.
Beef
A number of reasons have been given for China’s curbing Australian beef from major meat companies. A spokesman for the State Department said the restrictions were protecting the health and safety of Chinese consumers amid reports of Covid-19 infections in global meat factories, and also criticized Australia’s pursuit of an investigation into the origins of the coronavirus. However, he denied that the two issues were related.
Another reason given by China for suspending purchases from one producer is the discovery of banned drugs in beef products. Curbs have been extended to other Australian companies, although China has offered no reason at all for the last stop. Australia accounts for a whopping 18% of beef imports from China.
Lobster
Australian lobster has been cleared through customs delays due to increased import inspections for trace elements of minerals and metals, and most exporters have decided to suspend shipments to China until the process is clearer, according to an industry group.
Customs delays are particularly damaging as live lobsters are typically flown in on ice and must be consumed within 72 hours of leaving Australia if they do not end up in storage tanks in China. The Chinese market accounted for more than 90% of Australian rock lobster exports worth A $ 752 million ($ 573 million) in 2018-19.
Wood
China prohibited the import of logs from the states of Queensland, Victoria, Tasmania and South Australia after finding pests during controls. Imports of barley from Emerald Grain Australia were also banned on customs clearance after China said weeds had been found on recent arrivals.
Chinese customs called for tougher quarantine controls on all timber and barley from Australia, while State Department spokesman Wang said China has repeatedly found biological hazards in Australian wood products and that they have a “serious danger ”to the domestic industry. China buys about a quarter of its overseas timber from Australia.
Others
There are other Australian commodities in China’s reticle as tensions escalate. China has commissioned merchants stop buying products like copper ore and concentrate, sugar and cotton, according to people familiar with the situation. Wheat has also been identified as a possible target by the Australian government forecaster Abares.
So far, iron ore and gas – two of Australia’s biggest export earners – have been spared as any import restrictions could unnecessarily harm China’s own economy.
– With help from Jasmine Ng, Shuping Niu, Sybilla Gross and Dan Murtaugh