China hikes imports taxes on Australian barley, sorghum

The Chinese government has raised import tariffs on a range of Australian goods that previously enjoyed tariff-exemptions under a free-trade agreement signed in 2015.

Amid escalated diplomatic tension between the two countries, barley and sorghum will face a 3% and 2% tariff, respectively, according to an official statement released by the Chinese government Monday.

This new tariff regime, which will puts Australian goods at the same tax level as those from other countries, will last until December 31 this year, according to the statement.

China and Australia signed a bilateral free-trade agreement in 2015 under which most Australian commodities ranging from agricultural goods to chemicals enjoyed tariffs below the most-favoured nation level set by the World Trade Organization.

But the agreement included a clause indicating that when the import volume of a commodity reach certain levels, tariffs will be returned to that level.

“The number of import declarations for commodities (category 1) under special safeguard measures has reached the trigger level for that year,” the same statement said.

However, traders expect this change to not have any large impact on Chinese imports of barley from Australia as the former nation had already slapped an 80.5% anti-dumping and anti-subsidy duty on the latter in May 2020.

This had diminished nearly all buying interest from China as political tensions escalated between the two countries.

“Nobody dares to play with it,” one grain import manger said regarding imports of Australian barley and sorghum.

China was the largest customer for Australian barley, accounting for more than half of its total annual export volume.