China’s government has used its own media to confirm suspensions on seven types of Australian exports including wine and coal, in a multi-billion-dollar blow.
The Global Times — a Communist Party tabloid often used to send signals to other countries — confirmed what it called the ‘import suspension’ in an English-language article.
It is the first public confirmation from any Chinese government organisation.
Earlier this week Chinese wine and lobster importers were summoned to a series of meetings organised by the Foreign Trade Department of China’s Ministry of Commerce to be told imports of Australian wine, lobsters, sugar, coal, copper ore and concentrate, barley and timber would no longer be allowed after Friday.
But China’s Commerce Ministry has publicly refused to confirm the reports and China Customs, as well as two major ports, have told the ABC they have not yet received instructions, plunging exporters into a state of uncertainty.
The suspension threatens to cut the value of Australian exports to China by $5-6 billion dollars annually if maintained.
In its article, the Global Times also made little effort to back previous Chinese government claims that the various trade strikes launched against Australia this year are not politically motivated.
“Analysts warned that Chinese consumers’ confidence in Australian products would significantly drop if Australia continues to sabotage bilateral relations, which would cost Australia its best and biggest market, jobs and an opportunity to quickly recover from the pandemic,” it said.
Trade Minister Simon Birmingham said Australia wanted confirmation directly from China’s government or an assurance that “normal customs and related processes” would be applied to Australian goods.
“Continued uncertain and inconsistent messages from China are heightening risks and undermine the statements made by President Xi at this year’s China International Import Expo,” he said.
Major wine exporter prepares for tariffs
This week, the trade of wine and rock lobster has already been disrupted by reports of the suspensions, with exporters holding back on sending new consignments.
On Thursday, Treasury Wine Estates chairman Paul Rayner told the company’s AGM it was preparing for severe tariffs, as part of an investigation into the Australian trade and allegations of wine-dumping.
“We’re preparing for a range of potential outcomes from mild to severe tariffs,” he said.
Treasury Wine Estates is heavily invested in the Chinese market, including with its popular brands such as Penfolds.
Mr Rayner said depending on the investigation’s outcome, TWE would pass on imposed tariffs to consumers, pursue other company strategies or even “reallocate product” to other markets such as South East China, Australia or Europe.
Yesterday, the China Alcoholic Drinks Association (CADA) called for retrospective tariffs to be placed on the trade if the investigation proved Australian winemakers were selling wine to China for below the cost of production.
It is understood any tariffs would likely be back-dated to August when the investigation was launched.
A similar investigation led to hefty tariffs being placed on Australia’s barley trade to China in May this year, with an industry appeal to China to overturn the ruling rejected last weekend.
The Australian government is now consulting with exporters across a range of commodities about a potential appeal to the barley ruling at the World Trade Organisation.