China drops tariffs on Australian wine

The announcement was made by China's Ministry of Commerce on March 28. The move ended three years of high tariffs on Australian wine producers and marked a warming period in Sino-Australian relations.

Tariffs of up to 218.4% were first imposed by China in March 2021, along with a series of other trade barriers, on Australian goods after Canberra called for an investigation into the origins of Covid-19. Sino-Australian relations improved in 2023, leading China to gradually lift trade restrictions on Australian goods.

Trung Quốc bỏ thuế quan đối với rượu vang Úc- Ảnh 1. — Bottles of wine in the wine cellar of Trio Wine Bar in Beijing (China) on November 1, 2023

"Due to changes in the Chinese wine market situation, anti-dumping and anti-subsidy duties on wine imported from Australia are no longer necessary," China's Ministry of Commerce said in a statement.

In response, the Australian government said: "We welcome this outcome, particularly at this important time for the Australian wine industry."

Previously, Australian wine imported into China enjoyed zero tariffs after the two countries signed a Free Trade Agreement (FTA) in 2015, giving it a 14% tariff advantage over many other countries.

Since 2020, China’s sanctions on the Australian wine industry have caused the country’s producers to significantly limit exports to the billion-people market. In the first half of 2023, Australian wine accounted for just 0.14% of China’s wine imports compared to 27.46% in 2020 (before sanctions).

China began imposing tariffs on Australian products in 2020, prompting Canberra to lodge a complaint with the World Trade Organization (WTO). Australia said removing the Chinese tariffs would also mean it would stop its WTO legal proceedings.

Chinese Ministry of Commerce spokesman He Yadong said on March 28 that with the joint efforts of both countries, China and Australia have reached a consensus on properly resolving disputes within the WTO framework.

Treasury Wine Estates (OTC: TSRYF), Australia's leading publicly listed wine producer, expressed support for the decision. The company expressed its desire to re-engage in the Chinese market, as well as to increase sales and brand management. "Today's announcement is a significant positive signal not only for Treasury Wine Estates, but also for the Australian wine industry and wine consumers in China," CEO Tim Ford said in a statement.

The removal of tariffs would also be a positive move for Australian grape growers amid millions of vines being destroyed to curb overproduction and falling wine consumption worldwide.

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