Barley Blow to Australian Farmers After China Tariff Slap

Friday, 22 May, 2020

The ban on four Australian red-meat-processing plants and most recently, the hefty levy on barley, indicate China is not in a forgiving mood and this could just be the start of more trade restrictions on export-reliant Australia. But iron-ore analyst Du Hongfeng informed the AFR the brand new system may goal Australian importers.

Shi Yinhong, an adviser to China's cabinet and a professor of global relations at Renmin University in Beijing, said ties between the two nations were more likely to deteriorate than improve, given Australia's foreign policy alignment with the U.S.

Wool exports have already suffered from a drop to a five-year low in sale prices because of a halt in demand outside of China during the Covid-19 pandemic - allowing Chinese buyers greater ability to dictate the prices they pay.

Although tariffs on such products wouldn't be as catastrophic for Australia than if China was to take aim at its lucrative exports of resources (like iron ore and coal), it would still be a significant blow for an economy that is headed for its first recession in almost 30 years. But Rural Bank's chief operating officer, Will Rayner, told the Guardian the wool and barley industries were similar in their vulnerability to Chinese tariffs.

But Birmingham said Australia will not engage in a trade war with one of its biggest trading partners.

"This would continue until tariffs were removed or a new market was found".

Australia, meanwhile, is seen turning to the Saudi feed barley market.

However, Beijing claims the move is to stop Australia dumping cheap barley onto the Chinese market.

"The US has become the biggest loser for being isolated and marginalised, reflecting its failure in global governance, some Chinese analysts said, noting that such incompetence was amplified after it failed to besiege China at the World Health Organization with the help of two of its biggest pawns - Australia and the island of Taiwan". Australian diplomats worked with the European Union to gather support from the majority of nations at the WHA to support the resolution which was put forward by the European Union, Australia said.

Now there's a bitter irony, if China were to source farm exports from the USA to compensate for the shortfall in Australian supplies.

Senator Payne said Australian exports would always comply with other countries' rules. "Both sides have made it clear that that's what they should do".

Agriculture Minister David Littleproud said Australia would appeal the barley decision directly with China before launching action at the World Trade Organisation. Australia's first reported case on March 1 was a 78-year-old man who had been a passenger on the Diamond Princess cruise ship.

"There's wool, there's iron ore, education, tourism".

All iron ore delivered to China still need to go through field inspection and quarantine, including radioactivity detection, quarantine treatment of foreign inclusions and suspected or adulterated solid wastes, the customs said in a statement.

Australia has also backed the United States in its stand-off with China over territorial disputes in the South China Sea, echoing Washington's claims of Beijing's expansionism and aggression.

Nearly 6 million Australians have downloaded the COVID-safe app, still short of the 40% of 18 million smartphone users the government has said would make it an effective tool, amid privacy concerns about the use of the data.