China defends tariffs on Australia barley’s as relations sour

China was “prudent” and “restrained” in its use of trade remedy measures according to the nation’s commerce minister, who defended the recent decision to impose anti-dumping duties on Australian barley as being based on evidence.

“We have found out that Australia has subsidized the grain, and there has been dumping in the Chinese market which caused damage to local producers,” Commerce Minister Zhong Shan said in a briefing on the sidelines of the ongoing national parliament sessions on Monday.

Australia has rejected the Chinese claim of dumping, with Trade Minister Simon Birmingham saying last week that “China’s decision is one that does concern us deeply, because it appears to have been based without a proper understanding of the facts or the evidence.”

Australia’s call for an independent investigation into the origins of the coronavirus outbreak has led to a worsening of relations between the two countries, with China’s ambassador saying last month that this could lead to a consumer boycott of Australian beef or wine. The barley tariffs and the banning of beef exports from four meat plants this month added fuel to the debate in Australia over whether China was trying to punish the nation for calling for an investigation.

A Chinese foreign ministry spokesman later said that the meat bans were a health and safety issue, and denied any link between the action and the call for a probe. China imposed an anti-dumping duty of 73.6% and an anti-subsidy duty of 6.9% on Australian barley, effective from May 19.

China is considering targeting more Australian exports including wine and dairy, people familiar with the matter told Bloomberg last week.

Zhong didn’t mention the deterioration of bilateral relations and didn’t indicate if any more measures are on the way. Instead, he said the investigation into barley imports, which started 18 months ago, was a lawful action.

This is the first trade-remedy investigation China has launched against Australian goods since the establishment of bilateral relations, according to Zhong. During the same period, Australia has made 100 actions against Chinese goods, with three started just this year, he said.

Diplomatic relations between two nations have worsened in recent years, with Australia saying Beijing’s “meddling” in its government, media and education system was a catalyst for new anti-foreign interference laws in 2018. Like the U.S., Australia has also banned Huawei Technologies Co. from building its 5G network.

Zhong called on the members of World Trade Organization to use trade remedy measures “with caution” as the spreading pandemic is damaging global commerce.