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China imposes a tariff on Australian barley as trade tensions escalate

19 May 2020

China announces an anti-dumping and anti-subsidy duty aimed at Australia.

According to reporting in Reuters, China has imposed an 80.5 percent tariff on Australian barley imports from 19 May. The move is expected to essentially stop the billion-dollar trade flow between the two countries.

China's Ministry of Commerce said it had confirmed dumping by Australia and significant damage on its domestic industry as a result, following an inquiry which began in 2018.

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

Australia is the biggest barley supplier to China, exporting about A$1.5 billion to A$2 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.

In contrast, China – which is the world’s top barley importer – can shift purchasing to other barley-producing countries like France, Canada, Argentina or other small European exporters.

"It's very replaceable," said Andries De Groen, managing director at Germany headquartered barley trader Evergrain.

Australia's Minister for Trade 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," Birmingham said in an emailed statement.

"We reserve the right to appeal this matter further."

"The issue is part of broader juggle that Australia makes between its political place in the west and economic place in the east," Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia, said of the barley tariff.

Read more about this story here.



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