Barley tariffs: One year since China flexed its trade muscle

This month marks one year since China whacked a 80.5 per cent tariff on Australian barley. Here’s how the last 12 months have played out.

Twelve months have passed since the Chinese government slapped an 80.5 per cent tariff on Australian barley. Picture Rohan Kelly.

THIS month marks one year since China slapped Australian grain growers with a staggering 80.5 per cent tariff on barley, off the back of dumping allegations. But producers should not hold their breath waiting for early easing of tariffs or a resolution from the World Trade Organisation, according to one industry expert.

In May last year, the Chinese government implemented a 73.6 per cent dumping duty and a 6.9 per cent subsidy duty on Australian barley, following an 18-month anti-dumping investigation. The decision followed weeks of growing tensions between the two nations.

Thomas Elders Markets analyst Andrew Whitelaw said despite the initial knock to industry following the announced tariffs, Australian barley was able to find new markets.

“The reason we were able to switch to other nations so quickly is because of China,” Mr Whitelaw said.

“The tariffs have benefited us to an extent … China was still buying barley, and the barley which would normally go into places such as Saudi Arabia went to China.

“It’s a bit of a Catch-22; we don’t have China, but they’ve helped us to get other markets.”

Despite it effectively dodging a bullet, Mr Whitelaw said Australia should not expect an early lifting of tariffs on barley into China.

“The tariffs imposed are for five years. It will last five years unless China changes its mind or if the WTO comes up with something, but we’ve got to go with the worst case scenario,” he said.

Grain Growers chairman Brett Hosking said being forced to look beyond the Chinese market had forced the grains industry to pivot and diversify.

“We were fortunate to be able to re-establish trade relations with Saudi Arabia, which is more a feed market not a malting market,” Mr Hosking said.

“We do know we are sacrificing that $50 a tonne market, which if China was there they’d be paying for malt. But most growers are happy with how the season has been.”

Mr Hosking said at the end of this month a request would be made to the WTO anti-dumping committee for the formation of a panel to investigate China and the tariffs they have imposed.

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