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May 30, 2022 View:

Australian wine may be subject to Chinese tariffs starting this month

Chinese importers are urging Australian winemakers to ship their goods to China within the next week amid growing concern that China will impose A$1.2 billion in tariffs on Australian wine as early as this Sunday, according to the Australian Financial Review.

Image from: Australia

Although the Chinese government has not yet signaled the imminent imposition of tariffs, the industry is already abuzz with the possibility of early action by the Chinese side. According to the World Trade Organization (WTO), the first point at which China will initiate duties on Australian wine is Oct. 18, 60 days after it launches its anti-dumping investigation.

Chinese importers are nervous about the tariffs and are asking to bring their products in earlier, Tony Battaglene, president of the Australian Grape and Wine Association, an industry group, said today.

But I don"t expect that to happen. As far as we know, there is no basis (for the October 18 tariffs).

On August 17, China's Ministry of Commerce announced the launch of anti-dumping investigations against 10 Australian wine producers after it said it had received complaints from the China Wine Industry Association that Australian winemakers were dumping their products in China and receiving subsidies. Penfolds producer Fognac Wine Group, Casella Wines, which produces Yellow Tail, as well as Merit Wines, Australian Vintage, Yalumba, South Australian Wine Group, The Wine Company, Truffle Wine, Wingara Wine Group and Stoney Rise were all named in the survey.

The China Wine Association believes that Australian wine is being dumped by as much as 202.7 percent. Shane Oliver, chief economist at AMP Capital, said that if Australian wines were subject to tariffs, their prices in China would inevitably rise sharply in response.

But Battag says that while some in the industry have prepared for the worst, he has not received any signals that China will act at the earliest point at which the levy can be triggered. The second trigger for the levy is on Nov. 16, when Australian brewers will submit a questionnaire to the Chinese Ministry of Commerce.

After a similar investigation into Australian barley and restrictions on beef exports to China, the country's wine industry is not confident of a positive outcome to the anti-dumping investigation.

Both the Scott Morrison administration and wine makers have denied the dumping allegations.

It is reported that some of the Australian winemakers named for investigation have registered to attend China's annual import expo in Shanghai in November.

The Australian Financial Review noted that the former Chinese ambassador to Australia, Fu Ying, had taken a conciliatory tone when speaking to the newspaper about Australia-China relations two weeks ago. However, tensions between Australia and China have risen again this week after news broke of Chinese restrictions on imports of Australian coal and the impending trial of detained Chinese-Australian writer Yang Hengjun (also known as Yang Jun).