China to charge extra anti-subsidy duties on Australian wine

China will start collecting extra duties on Australian wine from Friday, further ratcheting up tensions with Canberra and handing another blow to an industry already hit by tariffs last month.

The temporary anti-subsidy duties will be charged on wine imports starting Dec. 11, China’s Commerce Ministry said in a statement Thursday. That comes on top of temporary anti-dumping tariffs imposed in November.

The decision is the latest in a series of actions against Australian exports, which the government in Canberra has called ‘economic coercion’ as the relationship between the two nations sours. China has denied that the actions are linked to bilateral political tensions, but has repeatedly called for the Australian government to do more to improve ties.

Already this week, China has blocked timber imports from two Australian states and banned beef imports from another meatworks. There were also media reports that two lamb exporters have been unable to get reapproval to export to China despite now being free of Covid-19.

There’s “mounting evidence” that Beijing’s actions aren’t based on technical issues, Agriculture Minister David Littleproud told the ABC Tuesday. Trade Minister Simon Birmingham said Wednesday that Chinese tariffs on barley and wine were inconsistent with the bilateral free-trade agreement and World Trade Organization rules.

‘Totally unfounded’

The Chinese embassy in Canberra called those remarks “totally unfounded” in a statement Wednesday, saying that China had fulfilled its obligations under the free-trade agreement.

The new anti-subsidy tariffs will be charged at a rate of 6.3%-6.4%, while the anti-dumping tariffs were at 107.1%-212.1%. China’s Ministry of Commerce said last week that these temporary measures would usually be in place for four months, though this could be extended to nine months. If extended, that would take them through to August 2021, when China’s investigation into dumping and subsidies of Australia wine is expected to finish.

The second raft of wine tariffs is at a similar level to anti-subsidy duties placed in May on Australian barley, which was also subject to much higher anti-dumping tariffs.

“I think that’s pretty good evidence that there’s no significant subsidy in the Australian industry, which is nothing new,” said Tony Battaglene, head of industry group Australian Grape and Wine, referring to the anti-subsidy tariffs of 6.3%-6.4%. “Obviously, I don’t agree that there’s enough for even that much. In real terms, the additional 6.3%, for that sort of margin on top of the existing tariffs, makes no commercial difference.”