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Australia–China trade war

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2010s trade war between Australia and China See also: Australia–China relations

The Australia–China trade war is an ongoing trade war between Australia and China.

The exact date of when the trade war began is debated, however it is understood it began in either 2017 or 2018.

2010s

Tensions between China and the Western world increased in the mid-2010s. China's territorial disputes have been cited as one reason for the tension. The political status of Taiwan and territorial disputes in the South China Sea represent major differences between China and the West. Australia has been a member of the Quadrilateral Security Dialogue, which is widely viewed as an attempt to counter China's influence in the Asia–Pacific.

China escalated its cyberwarfare activities after the election of Donald Trump, including in Australia.

2018

In 2018, the China–United States trade war began.

A political scandal took place in Australia in 2018, which resulted in Australia tightening its foreign political influence laws. The change came after Australian Senator Sam Dastyari, who was relatively sympathetic to China's view of its territorial disputes, accepted payments from Chinese donors, leading to his resignation. The scandal resulted in Australia initiating a foreign agent register and a ban on foreign political donations. It has been suggested that the Chinese government perceived the regime as targeting China.

In 2018, Australia banned Chinese telecommunications companies Huawei and ZTE from providing 5G technology for new networks, citing security concerns.

2020

COVID-19 dispute

In early 2020, Prime Minister Scott Morrison endorsed an inquiry into the origins of COVID-19, which angered China. China's ambassador to Australia, Cheng Jingye, warned Australia it was treading a “dangerous” path, and that the Chinese may not wish to consume Australian products.

Following this, China started imposing import tariffs on some Australian exports. China gave a range of reasons for the tariffs, ranging from dumping concerns to bark beetles found in timber. China denied that the tariffs were related to Scott Morrison's call for an independent investigation into the origins of COVID-19.

The tariffs included a wide range of Australian Agricultural products, including barley, beef, cotton, lamb, lobsters, timber and wine. They also included coal, but not iron ore.

However, facing international pressure, China agreed in May 2020 to allow a World Health Organization investigation of the origins of COVID-19, which took place in 2021.

Coal

China stopped accepting coal shipments, leaving ships containing hundreds of millions of tonnes of coal stranded on China's coast. In December 2020 the government formalised a position to increase coal imports from Mongolia, Russia and Indonesia, in place of Australia's $14B of coal exports to China.

Agricultural tariffs

Agriculture tariffs and market shares are as follows.

2020 China tariffs and affected markets
Product Tariff Value of China market (AUD) Affected market share (% of all exports) Years in place
Barley 80.5% $1 billion ~50% 2020-23
Beef (blacklisting of 4 abattoirs) $3 billion (all abattoirs) ~5% 2020-24
Wine 206% $1.26 billion ~40% 2020-24
Cotton 40% $800 million ~70% 2020-23
Lobster (unofficial ban) $771 million ~50% 2020-24
Timber (unofficial ban) $1.9 billion ~50% 2020-23

At the time, China was Australia's largest agricultural export market, representing 28% of the total. China represented 70% of cotton exports. Agriculture is one Australia's most trade-exposed economic sectors.

The tariffs had a number of impacts on Australian agriculture. Although Australia found alternative markets for barley, such as Saudi Arabia and Mexico, one analyst estimated Australian farmers were losing $30–40 per tonne of barley, with Australian barley substantially cheaper than barley from France or Argentina.

Southeast Asian countries like Singapore and South Korea, along with the UK, increased their imports of Australian wine, but the wine export market lost one third of its value, a loss which continued for years.

Lobsters that previously sold in China for $250 were now selling domestically for $100, with countries like Thailand increasing its imports.

Throughout 2020, China continued to place barriers to Australian trade, including unofficial guidelines to Chinese importers as well as other non-tariff measures such as customs procedures.

2021

China's import restrictions remained in place through 2021. The ban on coal imports erased $1B from Australia's economy. However, due to surging fossil fuel prices and a weaker Australian dollar, Australia's overall resources sector earned more revenue in 2021 than in any previous year.

In April 2021 Cheng Yingye, the Chinese ambassador to Australia, held a press conference at his residence where senior Chinese officials and Uyghur people from Xinjiang appeared virtually to denounce claims of Uyghur genocide, calling them "Western lies" and vowing a "response" by China.

WTO complaint

In June 2021, Australia commenced discussions with China, centered on its wine tariffs. Due to a lack of progress, Australia requested a World Trade Organization panel to determine whether the tariffs were illegal, which was established in October.

2023

Coal imports restart

In mid-2022, it was reported that China was considering ending its ban on coal from Australia. On 8 February 2023, a coal shipment from Australia arrived in Zhanjiang, the first in over two years. For the rest of 2023, coal shipments from Australia continued at around 50% of the 2020 levels.

Wine tariffs

In April 2023 the Australian government agreed to temporarily suspend the WTO action on China's wine import tariffs, pending an expedited review of the tariffs by China, which China announced it would complete in three months, with a possible fourth if needed. In July 2023 the extra month was added to the review timeline.

China ended its barley tariffs in August 2023. A statement from China's Ministry of Commerce said that "in view of the changes in the market situation of barley in China, it is no longer necessary to continue to impose anti-dumping duties and countervailing duties on the imported barley originating in Australia." The Australian government welcomed the decision, crediting the WTO for its role, and expressed hope that the wine tariffs could be resolved similarly.

In October, China agreed to a 5-month review of its wine tariffs, ahead of Prime Minister Anthony Albanese's visit to Beijing.

Barley tariffs

In August 2023, China's barley tariffs ended. From then until December China imported 314,000 tonnes of Australian barley worth $139 million.

Beef imports

In December 2023, China announced it would be lifting bans on three prominent beef companies: the Australian plants of JBS, the Australian Lamb Company, and Teys Australia.

2024

In March 2024, China ended its tariffs on Australian wine. In turn, Australia announced it would discontinue its formal complaint at the WTO.

China ended almost all of its remaining beef restrictions later that year. Anthony Albanese announced that China would end its restrictions on Australian lobster by the end of 2024. The ban on lobsters were lifted in December 2024.

See also

References

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