Australia–China trade war

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

Australia-China trade war
Part of Australia-China relations
Date2017/18-present
Location
Australia, China, Taiwan
Caused byAnti-communism, Australia-Taiwan relations, censorship in China, COVID-19 pandemic, Hong Kong national security law, human rights issues, potential Second Cold War, trade sanctions, Uyghur genocide
MethodsTrade war
Parties
Lead figures

The exact date of when the trade war began is debated, however it is understood it began in either 2017 or 2018.[1]

Sanctions

2020 agricultural sanctions

In 2020, China gradually imposed several trade sanctions on Australia. A wide range of Australian Agricultural products were sanctioned, including barley, beef, cotton, lamb, lobsters, timber and wine, as well as coal.[2][3]

Official reasons ranged from dumping concerns to bark beetles found in timber, with China denying that the reason was related to Scott Morrison's call for an independent investigation into the origins of COVID-19.

Agriculture tariffs and market shares are as follows.[4]

2020 China tariffs and affected markets
Product Tariff Value of China market (AUD) Affected market share (% of all exports)
Barley 80.5% $1 billion ~50%
Beef[5][6] (blacklisting of 4 abbatoirs) $3 billion ~5%
Wine[7] 206% $1.26 billion ~40%
Cotton 40% $800 million ~70%
Lobster[8] (unofficial ban) $771 million ~50%
Timber (unofficial ban) $1.9 billion ~50%

At the time, China was Australia's largest agricultural export market, representing 28% of the total.[9] China represented 70% of cotton exports.[10] Agriculture is one Australia's most trade-exposed economic sectors.[11]

The tariffs had a number of impacts on Australian agriculture.[12] 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.[13]

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,[7] a loss which continued for years.[14]

Lobsters that previously sold in China for $250 were now selling domestically for $100,[15] with countries like Thailand increasing its imports.

In 2021, the Australian government requested that the World Trade Organization establish a panel to determine whether the tariffs were illegal. The panel was established in October.[16] In April 2023 the Australian government agreed to temporarily suspend the WTO action, pending an expedited review of the tariffs by China,[17] 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.[18]

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.[19]

Triggers

2020

In early 2020, Prime Minister Scott Morrison endorsed an inquiry into the origins of COVID-19, which angered China.[20] Following this, China started posing import tariffs on some Australian exports. According to analysts, these sanctions were a retaliation for the endorsement. Australia had also imposed anti-dumping tariffs on some Chinese exports.[21]

Zhao Lijian, Chinese foreign ministry spokesman, tweeted a political cartoon of an Australian soldier holding a bloody knife to the throat of an Afghan child who is holding a lamb, in response to allegations of war crimes committed by Australian soldiers in Afghanistan. Australia urged China to apologise and for the tweet to be taken down.[22]

2021

China continued to further sanction Australia in 2021.[23] Another major trigger was the AUKUS agreement between Australia, the United Kingdom and the United States. In December, Australia joined the US-led diplomatic boycott of the 2022 Beijing Winter Olympics, which were held in February 2022, due to human rights abuses in China.[24]

2022

On 23 May 2022, the Indo-Pacific Economic Framework (IPEF) was formed by US President Joe Biden. The new alliance has 14 members; 13 founding members (Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam) and one later entry (Fiji). It is believed that the alliance was formed in response to the security deal between China and the Solomon Islands, which was signed earlier that year. Chinese Foreign Minister Wang Yi heavily criticised the new alliance.[25] Leading up to the 2022 Australian federal election, China was accused of interfering with the election and with the goal of the Australian Labor Party winning the election and defeating the Liberal-National Coalition.[26][27]

Bans on Chinese products

In 2018, Australia banned Chinese telecommunications companies Huawei and ZTE.[28]

See also

References
  1. "Timeline: The Downward Spiral of China-Australia Relations". Geopolitical Monitor. Retrieved 23 November 2022.
  2. "Financial Times". ft.com. Retrieved 23 November 2022.
  3. "China's list of sanctions and tariffs on Australian trade is growing. Here's what has been hit so far – ABC News". amp.abc.net.au. Retrieved 23 November 2022.
  4. Sullivan, Kath (16 December 2020). "The hit list: Sanctions imposed on Australian trade by China". ABC News. Retrieved 17 July 2023.
  5. Sullivan, Kath; Honan (12 May 2020). "Government's 'mismanagement' of China relationship to blame for trade woes, Labor says". ABC News. Retrieved 17 July 2023.
  6. Central, Beef (23 February 2020). "Australia world's highest value beef exporter in 2019". Beef Central. Retrieved 20 July 2023.
  7. Hough, Cassandra (29 November 2021). "China stopped buying Australian wine almost overnight. Luckily, these countries saved the industry from complete ruin". ABC News. Retrieved 17 July 2023.
  8. "Australia's premium rock lobsters find new markets, despite trade and pandemic disruption". SBS News. Retrieved 18 July 2023.
  9. Hurst, Daniel (28 October 2020). "How much is China's trade war really costing Australia?". The Guardian. ISSN 0261-3077. Retrieved 14 July 2023.
  10. Hughes, Megan (8 March 2023). "It's another bumper year for cotton despite a wet start. But who is Australia selling to after the China trade ban?". ABC News. Retrieved 14 July 2023.
  11. "Dollar's decline a mixed blessing". ABC News. Australian Broadcasting Corporation. 15 May 2012. Retrieved 15 May 2012.
  12. Brann, Matt (22 October 2021). "The true cost of China's barley tariff". ABC News. Retrieved 13 July 2023.
  13. Brann, Matt (22 October 2021). "The true cost of China's barley tariff". ABC News. Retrieved 14 July 2023.
  14. Clint, Jasper (14 August 2023). "Chinese tariffs, changing palates see Australia's wine stockpile grow to 2.8b bottles". ABC News. Retrieved 15 August 2023.
  15. O'Connor (11 December 2020). "Rock lobster sells for bargain price amid China trade woes". ABC News. Retrieved 17 July 2023.
  16. DFAT. "Summary of Australia's involvement in disputes currently before the World Trade Organization". Retrieved 15 July 2023.
  17. Dziedzic, Stephen (11 April 2023). "Australia suspending WTO action after China promises 'expedited review' of barley tariffs". ABC News. Retrieved 14 July 2023.
  18. Hurst, Daniel; affairs, Daniel Hurst Foreign; correspondent, defence (11 July 2023). "China delays decision on Australian barley tariffs in setback on resolving trade disputes". The Guardian. ISSN 0261-3077. Retrieved 17 July 2023.
  19. Sullivan, Kath (4 August 2023). "China ditches Australian barley tariffs after long-running trade war". ABC News. Retrieved 5 August 2023.
  20. "Australia and China spat over coronavirus inquiry deepens". Reuters. 19 May 2020. Retrieved 7 February 2023.
  21. "China punishes Australia for promoting an inquiry into covid-19". The Economist. ISSN 0013-0613. Retrieved 7 February 2023.
  22. "Australia demands China apologise for posting "repugnant" fake image". BBC News. Retrieved 23 November 2022.
  23. "Australia-China Trade Tensions: The Great Escape? | S&P Global". spglobal.com. Retrieved 23 November 2022.
  24. "2022 Beijing Winter Olympics: Australia joins US diplomatic boycott". BBC News. Retrieved 23 November 2022.
  25. "China says Washington's "divisive" Indo-Pacific strategy doomed to fail". South China Morning Post. Retrieved 23 November 2022.
  26. "Australian premier hints at Chinese interference in upcoming elections". aa.com.tr. Retrieved 23 November 2022.
  27. "Federal election 2022: China spies attempted to install Labor candidates". amp.smh.com.au. Retrieved 23 November 2022.
  28. "Huawei and ZTE handed 5G network ban in Australia". BBC News. Retrieved 23 November 2022.
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