China further inflicted more punitive tariffs on Australian wine today, as the Ministry of Commerce slapped an additional anti-dumping duty from 6.3%-6.4% on Australian wines, less than two weeks after smacking a crippling 212% tariff.
It says Chinese authorities found that “there was a subsidy on Australian wine exports to China, that the domestic wine industry was effectively affected consequentially”, and that “there was a causal relationship” between the subsidy and damages on China’s domestic wine industry.
As a result, starting from December 11, China will impose a temporary countervailing duty on Australian wines up to 6.4%.
Among the list of the duties levied on each Australian companies, Pernod Ricard, the parent company of Jacob’s Creek, was hit the hardest at 6.4%.
Majority of companies that participated in previous questionnaires by the Chinese government were slapped with 6.3% respectively, including Treasury Wine Estates, owner of Penfolds and Wolf Blass, Casella, Australian Swan Vintage, Accolade Wines, and Australian Vintage to name a few (full list can be viewed below).
According to the ministry, the amount of money to be paid for each company is calculated based on Customs approved duty-paid price × anti-dumping duty rate.
The new measure will most certainly cripple Australian wine industry, as it was already hit with as much as 212.1% tariff hike that took effect last month, threatening the country’s AU$1.2 billion wine exports to its most valuable export market.
Australian wines account for roughly 40% of China’s wine market, but now as relations between Canberra and Beijing continue to worsen, Australian wines are at the risking of being completely eradicated from the Chinese market.
A range of other Australian products had also been imposed with export restrictions by Beijing including Australian barley, wheat, coal, beef, lobster, sugar, copper and timber.
It’s unknown if relations between the two countries will ever improve after Australian officials complained that they can’t even get Beijing on the phone, a sharp contrast to five years ago when Australia and China relations were rosy enough to sign a Free Trade Agreement.