China has announced today that it will slap up to 212% temporary anti-dumping tariff on Australian wine exports starting from tomorrow, with Treasury Wine Estates hit with the sharpest so far, escalating the two countries’ fraught trade and political relations.
According to the statement issued by Ministry of Commerce, it would impose temporary anti-dumping duties between 107.1% and 212.1% on Australian wine exports, just weeks after a leaked memo stated that the country is banning Australian wine exports.
Although the ministry says the duties are temporary and there’s a possibility that the money collected could be refunded depending on full investigation result, chances of refunding are extremely slim.
Today’s escalation could upend Australia’s AU$1.2 billion wine exports to its most profitable wine market and affect thousands of jobs in both Australia and China.
According to to detailed list of tariffs imposed on leading Australian wineries, Treasury Wine Estates, the biggest Australian wine exporter to China and owner of Penfolds and Wolf Blass, was slapped with the highest tariff at 169.3%.
Accolade Wines, Pernod Ricard, Australian Vintage, Octtava Wines, Brown Brothers and Changyu-owned Kilikanoon were hit with 160.6%, respectively.
Casella Wines, owner of Yellow Tail, was slapped with 160.2% tariff. Chinese-owned Australia Swan Vintage, creator of Auswan Creek, was hit with the lowest rate at 107.1%. Its wine range includes a red called Ambassador Shiraz in honor of former Australian ambassador to China, Geoff Raby, who’s a sharp critic of Canberra’s current China policies.
Full list of tariffs on each investigated Australian wine company can be viewed below.
After the shocking announcement today, China’s Ministry of Foreign Affairs’ Spokesperson Zhao Lijian was quick to assign blame on Australia. He said, “Australia should reflect upon its own behavior and think about whether it respects China’s interests” after relations between the two countries sank to new low over 5G, Huawei, coronavirus inquiry and foreign interference.
“We urge Australia to correct its actions and face up to its mistakes,” Zhao warned.
TWE, which owns Penfolds, Wolf Blass, Lindeman’s, Yellowglen, and Rawson’s Retreat halted its trading upon the announcement as its shares dropped by 13%.
Beijing announced twin investigations into Australian wines in August on allegations of dumping and subsidy, threatening Australian wine’s prospects in China, which currently accounts for 40% of the market share ahead of France and Chile.
A range of other Australian products had also been imposed with export restrictions by Bejing including Australian barley, wheat, coal, beef, lobster, sugar, copper and timber as relations between the two trade partners become increasingly fraught.