Australia will drag China before the World Trade Organization (WTO) because of the import tax that the Asian country has imposed on Australian wine.
This threatens to plunge the already deteriorating relationship between Australia and China to a new low.
China was Australia’s largest trading partner, but since that country decided in 2018 to exclude Huawei from the construction of the 5G network, the relationship has started to sour. The fact that Australia last year called for an investigation into the origin of the coronavirus, hinting at the possibility that it could have escaped from a research lab in Wuhan, caused more bad blood in Beijing.
In recent years, China has imposed tariffs on various Australian products such as coal, beef, lobster and barley. Australia has already filed a complaint against China with the WTO for the latter charges. The import tax on wine became official in March but actually applied months earlier.
According to Australian trade minister Dan Tehan, Australian wine exports to China fell from A$1.1 billion, or just under 700 million euros, to just A$20 million. The import duties will rise to 218 percent, according to Tehan.
China formally alleges that the duties were imposed because Australian wine producers were dumping. Their wine is said to be subsidized and sold below market price.