China Slaps 200 Percent Tax on Australia Wine Amid Tensions

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China Slaps 200 Percent Tax on Australia Wine Amid Tensions

Wine joins beef, coal, barley, seafood, sugar and timber on the list of goods impacted by growing tensions between Australia and China.

China Slaps 200 Percent Tax on Australia Wine Amid Tensions
Credit: Pixabay

China on Friday added wine to the growing list of Australian goods barred from its markets in a trade war against Australia over disputes including its support for a probe into the origin of the coronavirus.

The Ministry of Commerce imposed import taxes of up to 212.1 percent, effective Saturday, which Australia’s trade minister said make Australian wine unsellable in China, his country’s biggest export market.

China increasingly is using its populous market as leverage to extract political concessions and increase its strategic influence.

Earlier, China stopped or reduced imports of beef, coal, barley, seafood, sugar and timber from Australia after it supported calls for a probe into the origin of the coronavirus pandemic, which began in China in December.

China’s ruling Communist Party is trying to deflect criticism of its handling of the outbreak, which plunged the global economy into its deepest slump since the 1930s, by arguing the virus came from abroad, despite little evidence to support that.

Meanwhile, Australia is working on a mutual defense treaty with Japan, which Chinese leaders see as a strategic rival, and has joined Washington and Southeast Asian governments in expressing concern about China’s construction of military facilities on islands in the disputed South China Sea, a busy trade route.

A Chinese foreign ministry spokesman called on Australia to “do something conducive” to improve relations but gave no details.

“Some people in Australia adhering to the Cold War mentality and ideological prejudice have repeatedly taken wrong words and deeds on issues concerning China’s core interests,” said the spokesman, Zhao Lijian.

Australia should “take China’s concerns seriously, instead of harming China’s national interests under the banner of safeguarding their own national interests,” Zhao said.

Australia’s main stock market index fell 0.5 percent on Friday following the news.

“To a certain extent, this is Australia’s fault for allowing itself to become a one-trick pony export-wise to China,” market analyst Jeffrey Halley of Oanda said in a report.

The Chinese market is especially important at a time when China is recovering from the coronavirus while the United States, Europe and other major economies are struggling with anti-disease controls that depress demand.

The Ministry of Commerce said the wine tariffs are in response to complaints Chinese producers were damaged by improperly low-priced Australian imports.

Australia’s government denied subsidizing wine exports.

Trade Minister Simon Birmingham said the accumulation of Chinese sanctions suggested they were due to “other factors” but gave no details.

“The Australian government categorically rejects any allegation that our wine producers are dumping product into China,” Agriculture Minister David Littleproud said.

Australia has imposed restrictions meant to block foreign influence in its politics following complaints Beijing might be trying to manipulate its government.

Australia also has joined the United States in imposing curbs on use of technology from Chinese telecom equipment giant Huawei Technologies Ltd. on security grounds.

By AP Business Writer Joe McDonald in Beijing, China.