The China Alcoholic Drinks Association (CADA) has called for an end to steep tariffs on Australian barley.
CADA citied soaring costs for Chinese beer manufacturers due to global supply disruptions, as well as a domestic production decline of more than 50% since 2009.
Citing China Customs statistics, CADA said the average price of imported barley into China in 2022 was 356.30 yuan per tonne, a 53 per cent increase from 232.67 yuan in 2020, putting “huge pressures” on malt producers and the beer industry.
The tariffs were imposed in 2020 as part of political sanctions on Australian goods, but CADA argues that the economic conditions have since changed and that anti-dumping measures are no longer necessary. Australia accounted for 60 to 70% of China’s total barley imports before the tariffs were imposed, but since then, there have been shifts to importing barley from Canada, France, and other countries.
Following the Australian government’s announcement that China was reviewing the tariffs, Australia agreed to suspend its World Trade Organisation appeal against the tariffs for three months, according to Foreign Minister Penny Wong.
However, the Chinese Commerce Ministry, which is reviewing the tariffs, said the review could last up to a year. CADA’s submission and Beijing’s decision to make it public bolster the likelihood that the tariffs will be lifted.
Scott Waldron, an agricultural economist at the University of Queensland, believes that China has realized that economic coercion against Australia is not working, and the move to lift tariffs would be an admission of this fact.
While China has a history of using tariffs and other restrictions as political punishment, it also uses them to protect its domestic industry. In 2020, China accused Australian grain growers of dumping barley, hurting Chinese producers, and imposed an 80.5% tariff on barley. Barley sales to China had been worth $916m in 2018-19 before it became the first Australian commodity hit by China’s sanctions.
There are now hopes that China will remove restrictions on other Australian products, including lobster, cotton, beef, and wine. However, CADA, which also represents China’s wine industry, is unlikely to support abolishing wine tariffs as they would undermine its domestic producers.
