China has placed tariffs totalling 80.5 per cent on barley imports from Australia. Image by AP PHOTO

economy, business and finance

China imposes 80% barley tariffs on Aust

2020-05-19 00:33:04

China has announced anti-dumping and anti-subsidy duties totalling 80.5 per cent on Australian barley imports, which is expected to all but halt a billion-dollar trade between them.

China’s Ministry of Commerce says it has confirmed dumping by Australia and significant damage to its domestic industry as a result, following an inquiry that began in 2018.

The tariffs on barley, which begin on Tuesday and will remain in place for five years, are the latest agricultural commodity to be affected by a deteriorating relationship between Canberra and Beijing.

The Chinese ministry said on Monday that duties of 73.6 per cent would be levied on all companies, including four named exporters, The Iluka Trust, Kalgan Nominees Pty Ltd, JW&JI Mcdonald & Sons and Haycroft Enterprises, as well as an anti-subsidy duty of 6.9 per cent.

Australia is the biggest barley supplier to China, exporting about $A1.5 billion to $A2 billion ($US980 million to $US1.3 billion) worth a year, which is more than half its exports.

Barley is used both for brewing and animal feed.

“There aren’t many alternative markets. It could be sold to Saudi Arabia, but it will be heavily discounted to what Australian farmers could have received by selling to China,” an Australian government source told Reuters.

By contrast, China – the world’s top barley importer – will simply shift purchasing to other key producers, including France, Canada, Argentina and some smaller European exporters.

Australia’s Trade Minister Simon Birmingham said the Chinese decision was deeply disappointing.

“We reject the basis of this decision and will be assessing the details of the findings while we consider the next steps,” he said in an emailed statement.

“We reserve the right to appeal this matter further.”

The relationship with Beijing soured in 2018 when Australia banned Huawei from its nascent 5G broadband network, while tensions were escalated by concerns within Canberra over China’s attempts to secure greater influence in the Pacific.

Commonwealth Bank of Australia’s director of agricultural strategy Tobin Gorey said the issue is part of a “broader juggle that Australia makes between its political place in the west and economic place in the east”.

China has been angered in recent weeks by Australia’s call for an independent inquiry into the origins of coronavirus.

Last month, Beijing’s ambassador to Australia said Chinese consumers could boycott Australian beef, wine, tourism and universities in response to Canberra’s demand.

Days later, Beijing suspended imports from four of Australia’s largest meat processors, worth about 20 per cent of Canberra’s beef exports to China.