Australian barley growers have warned of the devastating impact to the local economy in the wake of China slapping an 80 per cent tariff on Australian barley imports.
China’s Ministry of Commerce announced the tariffs after an 18-month investigation.
“The investigating authority has ruled that there was dumping of imported barley from Australia and the domestic industry suffered substantial damage,” the ministry said in a statement.
China imposed separate tariffs of 73.6 per cent for dumping allegations and 6.9 per cent over supposed government subsidies.
Agriculture minister David Littleproud has denied dumping allegations and previously said that he wouldn’t rule out bringing the issue to the WTO.
AAP reported that the WTO could take up to three years to reach a decision if Australia appeals.
The move adds to the rising diplomatic tensions between Canberra and Beijing after Australia pushed for an inquiry into the origins of COVID-19.
Just last week, China banned meat imports from four Australian abattoirs and Beijing’s ambassador in Canberra has previously raised the possibility of a consumer boycott of Australian products over the Coronavirus inquiry.
Over 110 nations, including China, backed the inquiry at the World Health Assembly on Monday night, AAP reported.
Australia is one of the top exporters of barley, producing one-third of local grain production while China accounts for 13 per cent of total grain exports, according to research agency IBISWorld.
Grain Producers Australia chairman Andrew Weidemann said the tariffs would have a huge impact on the industry.
“Most growers are completely gutted with the news,” he told Sky News on Tuesday. “It’s really a bitter blow to the Australian economy as well.”
He said farmers would lose A$500 million in value out of the current crop, which most growers have just finished planting.
Barley producers will be forced to look for new export markets such as India and Indonesia.
“China’s tariffs will 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 the demand for locally grown barley in recent months, American farmers, rather than Australian ones, are likely to benefit’,” said IBISWorld senior industry analyst, William Chapman.
Chapman said the heavy tariffs could end barley trade with China, which was worth A$917 million in 2018-19. The COVID-19 outbreak and the bushfires have already negatively impacted the local grain industry, with revenue expected to decline by 17.6 per cent in 2019-20.
According to IBISWorld, the revenue for the grain industry is expected to decline at an annualised 6.6 per cent over the five years through 2019-20, to A$9.8 billion.