Covid-19: Beijing Hits Australia with Huge Barley Tariff in a Fresh Blow to Relations

China has added to tensions with Australia by announcing anti-dumping as well as anti-subsidy duties totaling 80.5 percent on Australian barley imports from 19^th May, which is expected to halt a billion-dollar trade between the two nations.

Ministry of Commerce in China said it had confirmed dumping by Australia and huge damage on its domestic industry as a result, after an inquiry that started in 2018. The tariffs on barley that will remain in place for 5 years are the recent agri commodity to be affected by a worsening relationship between Beijing and Canberra.

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

It is important to mention that Australia is the biggest barley supplier to Chin and it exports about A$1.5 billion to A$2 billion worth a year i.e. more than half its exports. Barley is basically used both for brewing & animal feed.

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

On the other hand, Beijing - the top barley importer in the world - will simply shift buying to other key producers like Argentina, France, Canada & some smaller European exporters.

Simon Birmingham, Australia’s Minister for Trade said that the Beijing’s decision was deeply disappointing. Birmingham said, “We reject the basis of this decision & will be assessing the details of the findings while we consider the next steps”.

To recall, Australia’s relation with China soured in the year 2018 when it banned Huawei [HWT.UL] from its nascent 5G broadband network and tensions were escalated by concerns within Canberra over Beijing’s attempts to secure more influence in the Pacific.

Director of agricultural strategy, Commonwealth Bank of Australia, Tobin Gorey, said, “The issue is part of broader juggle which Australia makes between its political place in the west & economic place in the east”.

Beijing has been angered in recent weeks due to Australia’s call for an independent inquiry into the origins of Covid-19. In April, Beijing’s ambassador to Australia told that Chinese consumers can boycott Australian wine, beef, tourism & universities in response to Canberra’s demand. After some time, Beijing suspended imports from 4 of Australia’s largest meat processors, worth about 20 percent of Canberra’s beef exports to China.