Australian coal exports will be exempt from China’s ‘surprise’ coal levy under a new bilateral free trade agreement, according to a report by The Australian.

Trade Minister Andrew Robb reportedly secured the deal with the Chinese government before Beijing announced a three per cent tariff on coal imports earlier this month.

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Treasurer Joe Hockey described the tariff as a ‘surprise’ after meeting Chinese ­Finance Minister Lou Jiwei in Beijing, saying the tax would be harmful to Australia’s coal sector.

“He pointed out that Chinese coal producers are facing real challenges in terms of costs and I pointed out that Australians faced similar challenges by reducing their costs,” Mr Hockey said.

“The quicker we get an FTA, the quicker the tariffs will go. I think on both sides we are now more determined to get this done.”