Trade Minister Simon Birmingham has warned the world is watching as China picks off more Australian export markets one by one.
Cotton and wheat farmers have been warned they could be next after China extended sanctions on Australian timber and slapped new ones on lamb.
Honey and pharmaceutical producers could also be targeted as the trade dispute continues to spiral.
Senator Birmingham said China had displayed an unacceptable pattern of behaviour this year that undermined its free trade deal with Australia and flouted global commitments to the World Trade Organisation.
“Australia is not the only country that has seen these types of punitive measures and I expect the rest of the world will be watching quite closely what is happening in Australia,” he told ABC radio on Thursday.
“This is damaging not just in terms of the business or trade relationship, but it is damaging in terms of heightening the level of risk and concern that businesses right around the world have in terms of dealing with China.
“It doesn’t just increase that risk profile for Australian businesses, it does so for everyone.”
Senator Birmingham said Australian exporters needed to balance risk and reward in their approach to China.
“Through the course of this year, unfortunately, the risk of trade with China has heightened considerably,” he said.
Many sectors are enjoying seeing record-breaking levels of trade despite the worsening Chinese dispute.
“But for others the risk has clearly grown, the barriers have been imposed, and our government has expressed deep dissatisfaction about it directly to China and publicly here in Australia,” Senator Birmingham said.
“We will pursue every possible remedy we can on behalf of fair, honest hard-working Australian industries.”
China has imposed sanctions and restrictions against Australian barley, wine, meat, lobsters and coal in recent months as diplomatic relations sink to new lows.
The Chinese government is furious about Australia’s calls for an investigation into the origins of coronavirus, its vocal criticism of human rights abuses, and the imposition of foreign investment and interference laws.
IBISWorld said it expected Australian mining commodity exports, including iron ore, would likely be safe from any potential trade restrictions.
But in a research note released on Tuesday, it said agricultural and pharmaceutical manufacturers could be next affected by the souring relationship between the two countries.