China Lifts Tariffs on Australian Barley Imports, Improving Bilateral Relations
In a move that signifies improving bilateral relations, China has announced the lifting of tariffs on Australian barley imports starting August 5. This decision comes as a relief for Australia, as it will alleviate supply concerns after Russia suspended a humanitarian corridor for delivering key Ukrainian grains to global markets.
The anti-dumping tariffs and countervailing duties were initially imposed in mid-2020 during a period of heightened diplomatic tensions between China and Australia. Beijing had imposed import tariffs on various Australian exports, including wine, red meat, lobsters, and timber. However, China had already resumed Australian coal imports in January.
The Chinese Ministry of Commerce stated in a Friday statement that it is no longer necessary to continue imposing anti-dumping duties and countervailing duties on Australian barley imports due to changes in the Chinese barley market. However, no further details regarding these changes were provided.
Australia had agreed in April to temporarily suspend its World Trade Organization complaint against China for imposing 80.5% duties on Australian barley in 2020. This suspension paved the way for Beijing to expedite its review of the tariff decision. The tariffs were set to expire next week.
Australian trade minister Don Farrell, foreign minister Penny Wong, and agriculture minister Murray Watt issued a joint statement welcoming the outcome. They expressed their satisfaction with the removal of duties, as it will allow Australian barley exporters to re-enter the Chinese market, benefiting both Australian producers and Chinese consumers. They also announced that Australia will discontinue legal proceedings at the WTO.
The joint statement further mentioned that a similar process is expected for the removal of duties on Australian wine. China had introduced a crushing five-year tariff of up to 218% on Australian wine in March 2021.
The bilateral relationship between Australia and China deteriorated after Australia supported a call for an international inquiry into China’s handling of the COVID-19 pandemic, which originated in the Chinese city of Wuhan.
China’s decision to lift tariffs on Australian barley imports is likely to open up another source of barley imports for China. This will help ease concerns about food price inflation following Russia’s withdrawal from the Black Sea Grain Initiative, a landmark agreement facilitating the passage of Ukrainian wheat, barley, corn, and sunflower meal to global markets. China was the top recipient of Ukrainian agricultural products, including a significant portion of outbound barley volume.
The United States and its Western allies are now looking to China to help resolve the consequences of Russia’s exit from the crucial U.N.-backed agriculture deal.
