China has agreed to review the heavy tariffs (financial penalties) it imposed on Australian wine exports in 2020.
The Chinese Government announced the penalties after the Australian Government said it would support an investigation into the origins of COVID-19, which China said “hurt its feelings”.
The decision led to significant import taxes on Australian wines, which made it too expensive for most Australian wine-makers to sell to the Chinese market.
China announced restrictions on several Australian products in 2020, including wine, barley and beef.
On wine, it imposed an import ‘duty’ (tax) of between 116% and 218%. That meant importers had to pay considerably more in tax than what the wine would sell for. This effectively shut Australian producers out of China altogether.
China claimed it did this to stop Australian wine producers from ‘dumping’ cheap wine in China.
However, the move was widely seen as an excuse to punish Australia for supporting a U.S. proposal for an investigation into the origins of the COVID-19 pandemic.
China’s ambassador to Australia said the move was a betrayal. A Chinese Government spokesperson later acknowledged the import penalties were politically motivated.
Push to end the tariffs
In 2021, the Morrison Government lodged an official dispute with the World Trade Organisation — a global body that deals with trade disputes between countries.
The Government argued China’s Australian wine tariffs were “absurd” and “lacked any logical relationship to the facts”.
On Sunday, Prime Minister Anthony Albanese announced Australia would suspend this dispute after China agreed to review the penalties.
Albanese said the Government was “very confident” China’s review would lead to the full removal of the penalties. A similar review led to the removal of penalties on Australian barley earlier this year.
The announcement comes ahead of Albanese’s scheduled visit to China in November. It’s the first visit by an Australian Prime Minister since 2016.