MercoPress. South Atlantic News Agency

China slaps 80% tariff on Australian barley alleging subsidies and dumping

Beijing on Monday announced 80,5% tariffs of Australian barley after finding Australian subsidies and dumping had “substantially damaged domestic industry”

Australia is “disappointed” China has imposed massive tariffs on its barley and will consider taking the dispute to the World Trade Organization, the country's agriculture minister said on Tuesday.

But officials played down fears Canberra was headed for a trade war with its biggest export market, saying there would be no “tit-for-tat” response to the Chinese action.

Beijing on Monday announced 80,5% tariffs of Australian barley after finding Australian subsidies and dumping had “substantially damaged domestic industry”. The tariffs are due to last five years.

“To say that I'm disappointed is an understatement,” Agriculture Minister David Littleproud said in response.

“This is something that we will strongly reject, the premise that the Australian barley farmer is subsidized in any way, shape or form,” he said.

“We will now work through the determination by Chinese officials, calmly and methodically, and reserve our right to go to the World Trade Organization to get the independent umpire to make that determination.”

China accounts for more than 50% of Australia's barley exports, making it the country's largest barley market. The Chinese commerce ministry said a 73.6% anti-dumping tariff and 6.9% anti-subsidy tariff on imports of Australian barley would take effect Tuesday.

It comes days after Beijing suspended imports from four major Australian beef suppliers, amid a diplomatic tiff between the two countries over Canberra's push to probe the origins of the coronavirus pandemic.

Littleproud denied any link between the tensions and the new tariffs – which follow a Chinese investigation launched in November 2018 – saying there was “no trade war”.

“We continue to trade openly on a number of other commodities, not only in agriculture, but in minerals and also services. This will not change,” he said.

Australian Trade Minister Simon Birmingham said there would be no retaliation against China, the country's biggest trading partner.

“We don't pursue our trade policies on a tit-for-tat basis. We will continue to operate as we always do,” he said.

“We acknowledge that China has a right to use anti-dumping laws and rules. We use those laws and rules at times as well. But it is a case where China, we think, in this case, has made errors of both fact and law in the application of those rules.”

A joint statement from five grain growers' organizations said the dispute was likely to disrupt and halt exports, costing the Australian barley industry at least US$327 million a year.

Littleproud said Australian barley farmers would now seek to pursue other export markets – but filling the hole left by Beijing will not be easy. China imported 2.5 million tons of Australian barley last financial year, with the next-biggest importer, Japan, buying less than 800,000 tons.