China Imposes Extra Anti-Subsidy Duty on Australian Wine

China’s Ministry of Commerce announced Thursday that it will impose temporary anti-subsidy duties on Australian wine imports starting December 11.

“Starting Friday, importers of Australian wine are required to pay anti-subsidy duty deposits ranging from 6.3 to 6.4 percent,” the ministry said in a statement posted to its website on December 10, the state-run China Global Television Network (CGTN) reported.

The ministry decided to impose the duties on Australian wine imports based on the “preliminary ruling of an investigation launched on August 18, which found that China’s domestic industry has been subject to substantial damages due to subsidies of those products,” according to the statement.

China’s commerce ministry referred to an anti-dumping investigation of Australian wine imports it launched in August at the request of the China Alcoholic Drinks Association. The ministry said the probe would determine “whether Australian winemakers ‘dumped’ bottles of wine at deliberately low prices in order to crowd out local producers and claim a bigger market share,” the Australian Broadcasting Corporation (ABC) reported at the time.

Based on the anti-dumping investigation’s findings, Australian wine importers are now required to pay anti-dumping tariffs ranging from 107.1 percent to 212.1 percent, China’s Ministry of Commerce announced late last month.

The anti-subsidy duties announced Thursday are the result of a separate, but related investigation into Australia’s alleged subsidy schemes on wine exports to China announced by the country’s commerce ministry on August 31.

China receives 37 percent of Australia’s total wine exports and the recent tariff hike has already started to negatively impact Australia’s wine industry. Several Australian winemakers “made commercial decisions to divert wine shipments away from China” after it imposed the 200 percent anti-dumping tariffs on November 28, Reuters reported Wednesday. Other companies are “removing wine from ships en-route to China” when they dock mid-route in cities such as Singapore, Australian Grape and Wine chief executive Tony Battaglene told the news agency.

Australia’s trade minister, Simon Birmingham, told ABC Radio on Thursday that Canberra rejects Beijing’s claims that Australian wine is subsidized.

“Australian wine is the second-highest price point in the Chinese market. And for Australia, it’s basically our highest-priced market,” Birmingham told the national broadcaster.

Observers view the escalating trade tensions between Beijing and Canberra as a byproduct of deteriorating diplomatic ties between the two parties in recent months. Most trace the fallout to Australia’s public support in April of an independent inquiry into the true origins of the Chinese coronavirus, which the Chinese Communist Party has been accused of obfuscating. Since then, Beijing has imposed retaliatory trade restrictions on several Australian imports to China, most notably wine in recent weeks. Canberra has responded by increasing restrictions on foreign investors in Australia, officially citing national security concerns. The restrictions seem to largely target China, traditionally Australia’s top trading partner.

Birmingham on Wednesday told the Australian parliament that China has not adhered to a free trade agreement between the two nations or its World Trade Organization (WTO) obligations through its recent tariff hike, which appears to exclusively target Australian products.

Canberra has raised concerns “at a WTO meeting about China taking measures against Australian barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton,” the trade minister told parliament, according to Reuters.

The Chinese Embassy in Canberra on Wednesday said Birmingham’s comments about Beijing’s failure to adhere to free trade agreements were “totally unfounded.” China’s Ministry of Commerce has previously claimed to oppose unilateral sanctions and tariffs.

Australian Sen. Pauline Hanson proposed a China boycott on November 26 in response to “China’s recent economic attacks against Australia.”