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China threatens to impose levy on Australian barley

Australia’s trade relationship with China has been rocked further with a threat of tariffs of over 80 per cent on imports of Australian barley.

The move is based on accusations by the Chinese government that Australia has dumped cheap barley into the country, and adds to the increasing tension between the two countries over the COVID-19 pandemic.

Last month, China threatened to withdraw support from the nation’s major export industries after Australia began pursuing an independent review of the origins of the virus.

China is set to release the results of its dumping investigation, which would violate World Trade Organisation (WTO) rules, on May 19.

Australian Minister for Agriculture David Littleproud has denied the allegations, and has not ruled out taking the matter to the WTO if China proceededs with imposing tariffs, while Trade Minister Simon Birmingham said the move is deeply concerning and has “no justification”.

Birmingham said the government is working with the Australian grains industry to mount the strongest possible case against the 18-month anti-dumping investigation.

“Every country has a right to apply tariffs in relation to matters of dumping,” Senator Birmingham told reporters in Canberra on Sunday, according to AAP.

“But we are quite clear and firm in our view that there is no justification to find that Australia’s farmers and barley producers are subsidised or are dumping their product in such ways.”

Former Nationals leader Barnaby Joyce says China’s tariff threat is retribution for Australia supporting a review of COVID-19’s origins.

“This is a case of payback,” he told Seven Network’s Sunrise on Monday, adding that the coronavirus investigation is justified.

Barley accounts for approximately one-third of grain production in Australia, and China accounts for about 13 per cent of total grain exports.

IBISWorld analysts say the tariffs would effectively end barley trade with China, which is worth hundreds of millions of dollars.

‘China’s proposed tariffs would have a significant effect on Australian barley growers, as China is Australia’s single largest export market for grain. While China’s recovery from the COVID-19 outbreak has supported demand for locally grown barley in recent months, political tensions could cause the industry’s performance to deteriorate over the next five years,’ said IBISWorld senior industry analyst, William Chapman.

Grain growers in Australia have faced volatile conditions over the past five years, with drought and bushfires.

Fluctuations in global grain prices and supplies have contributed to a very high level of revenue volatility. According to IBISWorld research, revenue for the Grain Growing industry is expected to decline at an annualised 6.6 per cent over the five years through 2019-20, to $9.8 billion.

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