China lifts steep Australian wine tariffs as relations improve

Beijing imposed tariffs on Australian wine in 2020 during a diplomatic feud, raising duties from zero to above 200 percent.

China says it will lift steep tariffs on Australian wine imposed more than three years ago in the latest sign of improving relations between the two countries.

The anti-subsidy and anti-dumping levies were first imposed in 2020 along with a host of other trade barriers during a diplomatic feud over Australia’s support for a global inquiry into the origins of COVID-19. China had been Australia’s top wine export market, and Australian wine producers took a heavy hit from the duties, which were above 200 percent.

Ties have improved significantly since last year, leading China to steadily lift trade hurdles on Australian goods ranging from barley to coal and raising hopes the punishing tariffs on wine shipments would soon be removed.

“Given the situation in China’s wine market has changed, the anti-dumping and anti-subsidy tariff imposed on wine imported from Australia is no longer necessary,” the Chinese Ministry of Commerce said in a statement on Thursday, adding that the decision will take effect on Friday.

Previously, Australian wines imported into China were subject to zero tariffs after the signing of a free trade agreement in 2015, giving them a 14 percent tariff advantage over wines produced in other nations.

Australian wine accounted for 27.5 percent of Chinese wine imports before the duties were imposed. In the first six months of last year, they accounted for 0.14 percent as estimates put the cost of the tariffs for Australia’s economy at 20 billion Australian dollars ($13bn).

“We welcome this outcome, which comes at a critical time for the Australian wine industry,” the Australian government said in a statement.

“Since 2020, China’s duties on Australian wine effectively made it unviable for Australian producers to export bottled wine to that market. Australia’s wine exports to China were worth $1.1 billion in 2019.”

The imposition of the tariffs had prompted the Australian government to lodge a complaint to the World Trade Organization (WTO). The removal of the Chinese duties means Australia will end its legal proceedings at the WTO, the Australian statement said.

“We are willing to work with Australia to resolve each other’s concerns through dialogue and consultation,” said He Yadong, spokesperson for the Chinese Commerce Ministry.

Australia’s top publicly listed winemaker, Treasury Wine Estates, also welcomed the announcement and said it will start partnering with customers in China to expand sales and marketing as well as brand management.

“Today’s announcement is a significant positive not only for Treasury Wine Estates, but also for the Australian wine industry and wine consumers in China,” CEO Tim Ford said in a statement.

“This is a medium-term growth opportunity that we will pursue in a deliberate and sustainable manner, focused on growing our portfolio in China.”