China’s import tax crushes Australian wine exports in December

Trade figures show Australia’s wine industry income from the lucrative Chinese market was crushed by new import taxes in December.

China’s hefty wine tax has obliterated Australia’s exports, with winemakers sending less than $4m of the product to China in December.

It represented a 98 per cent dip in two months, dropping from $162.9m in October to just $3.5m in December, new trade figures show.

China’s ministry of commerce imposed the tariffs of up to 212 per cent on November 28 as part of its anti-dumping inquiry.

Red wine exports copped the biggest hit, dropping from $159.9m in October to just $3.3m in December.

Australia Bureau of Statistics figures show that white wine exports fell from $1.7m to $86,196, while rosé exports plunged $483,035 to just $24,937.

Despite China targeting Aussie wine, beef, seafood and barley in 2020, Australia’s total exports to China soared to $13.3bn in December, up $2.3bn or 21 per cent on the month before.

Chinese President Xi Jinping speaking at the virtual World Economic Forum this week. Picture: AFP photo/ World Economic Forum

South Australia sent $1.2bn of goods overseas in December, up from $926m in November.

The data on SA’s trade specifically with China for the period is not yet available.

Australian Grape & Wine chief executive Tony Battaglene said trade deals with the European Union and Britain would be “enormously important” for Australia’s wine industry after the lucrative Chinese market essentially slammed shut in November.

Australia hopes to sign a post-Brexit trade deal with Britain this year and is in talks with the EU.

South-East Asian markets, such as South Korea and Japan, would also be crucial.

“The China market will effectively be closed for the medium term,” Mr Battaglene said.

“We believe that if we work with the government to open up new markets then the grape and wine sector will help Australia’s economic recovery.”

It would require investment and diplomacy from the Federal Government, he said.

Trade Minister Dan Tehan. Picture: NCA NewsWire / Gary Ramage

Federal Trade Minister Dan Tehan said that the government would “continue to engage constructively with China to resolve outstanding trade issues”.

“We are also supporting Australian exporters to diversify their markets,” he said.

Mr Tehan, pictured, said the government was seeking better market access for exports in its trade deal talks with the EU and Britain.

Ironically, Chinese leader Xi Jinping urged countries not to impose trade sanctions or disruptions on other nations in a major speech this week.

“The strong should not bully the weak,” he said.

Originally published as China’s import tax crushes Australian wine exports in December