China continues to escalate trade dispute with Australia

China has added another 6.3-6.4% duty to Australian wine as it continues to complain about the dumping of Australian wine. The small increase in duty is not thought to be material considering the 107.1-212.1% duty already levied on Australian wines.

China is Australia’s largest and most valuable wine market and has benefited strongly from a free trade agreement that gave Australia much lower tariffs which were as low as 2.4%. In 2019 Australia exported just over $1 billion (Aus Dollars) of wine. The US came second with $446 million, and the UK came third with $397 million. Australia exports $3 billion in wine with China taking approximate 1/3rd. With much of Australian wine now uneconomical compared to other countries, China is likely to want to source more wines from other countries such as South Africa, Chile and New Zealand. However, most countries simply do not have the volumes to replace Australia in China.