China reviews tariffs on Australian wine for possible scrapping

The Chinese government has begun reviewing its tariffs on Australian wine, with Beijing likely to remove the taxes in the coming months to end years of punitive sanctions imposed after relations deteriorated.

The review started on Thursday and should end before Nov. 30, 2024, according to a statement from the Chinese Commerce Ministry. The Asian nation imposed anti-dumping tariffs of up to 218% on wine in March 2021, decimating what had been one of Australia’s major overseas markets.

Australia suspended its World Trade Organization case against the wine tariffs in October after reaching an agreement to “move forward to resolve this dispute.” As part of that agreement, Beijing was to review the tariffs, a process expected to take five months, the prime minister’s office said in a statement at the time, adding that it was “confident of a successful outcome.”

China imposed tariffs on wine and barley in an apparent attempt to punish Australia after then Australian Prime Minister Scott Morrison in 2020 called for an investigation into the origins of Covid-19, angering Beijing. China also blocked imports of coal and other goods from Australia.

Relations improved over the past 18 months as the new government of Prime Minister Anthony Albanese and Beijing sought to stabilize ties, culminating in the Australian leader’s visit to Beijing in November. Chinese companies have started buying Australian coal and copper ore again.

Wineries such as Treasury Wine Estates Ltd will likely benefit from the removal of tariffs, although it will take time to rebuild market share after almost two years shut out of China.

Even if these tariffs are removed, this doesn’t mean that relations have returned to a friendly state. Just a week after Albanese left Beijing, naval vessels of the two nations came into contact in the East China Sea, with the Australians accusing the Chinese of slightly injuring divers in the water. 

China rejected that accusation, with the Defense Ministry urging Australia to stop making “irresponsible accusations” and create a positive atmosphere for bilateral relations.