In a move signaling a significant thaw in relations, China has announced the removal of tariffs on Australian wine, ending a three-year trade dispute that had crippled the industry.
The tariffs, imposed in 2020 during a period of heightened diplomatic tension, devastated Australia’s wine exports to China, its biggest overseas market. This left winemakers struggling and saddled with a massive surplus of wine.
The decision to lift the tariffs, announced by China’s Ministry of Commerce, comes after months of gradual rapprochement between the two nations. This shift began with a change in the Australian government and led to high-level meetings, the release of a detained Australian journalist, and the first visit by an Australian premier to Beijing in six years.
Following Australia’s withdrawal of complaints filed with the World Trade Organization and a reversal on the cancellation of a Chinese company’s lease of the Port of Darwin, China began easing trade restrictions, allowing coal, barley, and timber to flow again from Australia.
While the removal of tariffs is a welcome relief for Australian winemakers, it will take time for the industry to recover. “We have the equivalent of 859 Olympic swimming pools of wine in storage,” said Lee McLean, CEO of Australian Grape & Wine Inc. “China is not going to solve that on its own.”
The price of red grapes has plummeted, forcing some growers to abandon their crops or accept contracts below production cost.
Despite the challenges, the lifting of tariffs marks a positive step towards normalizing relations between Australia and China. It also offers hope for the Australian wine industry, which can now begin rebuilding its presence in the Chinese market.
