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China Punches Oz’s Biggest Grain Exporter as Tensions Rise

We’ve reported here, many times, the rising tensions between the US-allied countries and their opposing economic force in China.

Recently, China begun proceedings to investigate alleged dumping of Australian wine into the Chinese market.

This move followed the application of an 80% tarrif on Australian barley imports, which many say was driven in response to Australia leading an international call for investigations into the Wuhan origin of the Corona virus outbreak. China was swift in its application of the tariff, wasting no time in responding to Prime Minister Scott Morrison’s call for an investigation.

Naturally, the Chinese advised that the tariff was unrelated, and had been an ongoing investigation for some time prior. Critics say that China is well accustomed to using its gargantuan economic influence to express distaste for geopolitical ructions and finger-pointing. The CCP is not well known for its tolerance of international criticism, especially from trade partners that rely heavily on its patronage.

Australian Trade minister Simon Birmingham rejects the basis of China’s decision to impose tariffs of more than 80% on barley imports. Photograph: Lukas Coch/EPA

At the time, The Guardian reported, Trade minister Simon Birmingham indicated Australia may appeal the imposition of a 73.6% anti-dumping tariff and a 6.9% anti-subsidy tariff applied to all Australian barley from Tuesday.

“Australia is deeply disappointed with China’s decision to impose duties on Australian barley,” he said in a statement.

We reject the basis of this decision and will be assessing the details of the findings while we consider next steps.

It seems that the Trade Minister and his department will now have another ‘international trade matter’ to deal with. This week, China has slapped a ban on Australia’s biggest grain exporter – a co-operative with about 4000 farmer members – after claims customs authorities found pests in a shipment of barley.

Chinese authorities claim there are multiple instances of pests being found in barley exported by CBH, which operates four port terminals in WA on behalf of its farmer members. Further to the implications of this action by the Chinese authorities, a concerning element is the subsequent suspension of CBH’s imports, and the removal of the company’s registration in China

Farmers and primary producers are now a key target of the Chinese government, in a seemingly rapid escalations of trade tensions

“It is a signal, showing that Australian firms will be in an unfavourable situation. People will be rather cautious when buying Australian goods now,” said a China-based grains trader, who declined to be named as he was not authorised to talk to the media

With tensions continuing to rise, the Chinese Government approved media outlines have also been active in pressing the government’s case on a broader basis.

Interestingly, the Global Times penned an article outlining the supposed foibles of a trilateral supply chain agreement between Australia, India and China. Rightfully, the outline the fact that the bilateral trade between each party pales in comparison to that of their trade with China.

Statistics showed that bilateral trade between India and Japan stood at $17.63 billion in 2018/19; two-way trade between Japan and Australia was valued at $88.5 billion in 2018/19; and bilateral trade between Australia and India was around $23 billion in 2019. By comparison, China’s trade with Australia alone totaled nearly $160 billion last year.

One thing is for certain, the increasingly level of government intervention in free-trade is not about to fade anytime soon. Australia finds itself in an unenviable position, being tied intrinsically to China economically, but pulled swiftly to the US on all matters geopolitical and military, without question.

Undoubtedly, the next shot across the bow is not far away, and we can safely wonder if the US will step in to make up for lost economic activity as a result of China’s increasing frustration with US allies and their constant geopolitical scalliwaggery.

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China bans barley imports from Australia’s largest exporter.

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