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China fires opening salvo

Lachlan Maddock
— 1 minute read

Australia has found itself in China’s crosshairs as the economic powerhouse levels massive tariffs on key exports amid escalating political tensions.

On May 18, China’s Ministry of Commerce confirmed that it would be levying 80 per cent tariffs on Australian barley on the grounds of the findings of an anti-dumping investigation launched in 2018. The tariffs have been announced as the Morrison government calls for an independent investigation into the origins of COVID-19 as the true scope and danger of the pandemic become more apparent. 

“Australia is deeply disappointed with China’s decision to impose duties on Australian barley,” said Trade Minister Simon Birmingham. “We reject the basis of this decision and will be assessing the details of the findings while we consider [the] next steps. We reserve all rights to appeal this matter further and are confident that Australian farmers are among the most productive in the world, who operate without government subsidy of prices.”

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The tariffs come after weeks of saber-rattling by Chinese state media, including the Global Times, which has warned that China could turn to emerging markets like Brazil that can supply the “huge amounts” of iron ore and coal that China needs to fuel both its domestic and international growth. 

“If that’s the outcome Australia wants to avoid, it is time for the country to start sending positive signals to prevent bilateral relations from further deteriorating,” the Global Times wrote in an editorial. 

China could also turn to the US for many of its imports, essentially extending its existing obligations under the phase one deal as a sign of good faith. But China will already struggle to meet its obligations, with some experts suggesting that the deal might have to be thrown out or completely restructured in order to preserve some kind of trade relationship between the two countries. 

For his part, President Xi Jinping has also now backed an investigation into the origins of COVID-19 on the basis that it is “conducted in an objective and impartial manner”. But any investigation would be questionable due to the infamous opacity of the Chinese Communist Party and the potential embarrassment that would arise were it found that China’s initial response, already questioned by many governments, was deficient.

 

China fires opening salvo
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