Australia will approach the World Trade Organisation (WTO) to file an official complaint after China slapped a 218% tariff on Australian wines last year.
China claims the increased tariff was necessary due to trade malpractice from Australia, which the latter denies.
Australia has been accused by China of the dumping of wine. This occurs when an exporting country sells a product cheaper in another country than it does in its domestic market, which increases its market share and drives out competition. This is illegal under international trade law.
Canberra has said it is prepared to interact directly with Beijing, but the rise in tariffs has hit Australian wineries badly. China is the biggest market for wines from Down Under.
Between December 2020 and March 2021 Australia exported A$12 million worth of wine to China. In the same period a year earlier, Australia had exported wine worth A$325 million to China.
According to the BBC, Dan Tehan, the minister of trade, tourism, and investment, said: ‘The government will continue to vigorously defend the interests of Australian winemakers using the established system in the WTO to resolve our differences.’
Diplomatic relations between Beijing and Canberra have been strained recently, with the Australian government calling for an investigation into the origins of the virus that causes Covid-19. Australia has also been upping its military spend as concerns about a more aggressive China in the region start to grow.