China drops heavy tariffs against Australian winemakers

Most recently, China has abolished heavy tariffs against Australian wine, marking a significant step towards improved diplomatic relations and trade ties between the two nations. The Chinese government had agreed to review the wine tariffs five months ago and has gradually unwound the trade barriers since then. The Commerce Ministry in Beijing announced on Thursday that it was no longer necessary to impose anti-dumping duties and other levies on imports of Australian wine.

Prime Minister Anthony Albanese expressed his gratitude for this development, stating that the re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers. The removal of these tariffs comes at a critical time for the Australian wine industry, which had faced difficulties exporting to China due to the imposed trade barriers.

In 2019, Australian wine exports to China were valued at $1.1 billion before the tariffs were implemented during the height of diplomatic tensions in 2020. The removal of these duties means that Australia will no longer pursue legal action against China at the World Trade Organisation, which had been initiated by the former coalition government.

While the Australian government’s approach is to cooperate with China when possible and engage in its national interest, some trade barriers still remain. Chinese tariffs are still in place for Australian rock lobster and beef, and in 2020, Beijing imposed trade sanctions worth $20 billion on a variety of Australian products, including coal and cotton. The tariffs on Australian wine specifically amounted to a hefty 220 per cent tax.

As South Australian Wine Industry Association president Kirsty Balnaves noted, the Chinese market has evolved since the imposition of tariffs. There is now stronger in-market competition for wine, increased choices for consumers at various price points, and a decline in alcohol consumption. Balnaves emphasized that South Australian exporters will need to invest time in assessing opportunities, creating awareness, educating consumers, and reintroducing their wines to the market.

Despite the remaining challenges, Prime Minister Albanese reaffirmed his government’s commitment to trade diversification and supporting Australian businesses in selling their products on the global stage. The removal of tariffs on Australian wine is seen as a positive step towards strengthening trade relations between Australia and China, and it is hoped that further trade impediments affecting Australian exports will be addressed in the future in the interests of both countries.