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China’s ‘retaliation’ as tit-for-tat trade war continues

·3-min read
(Source: Getty)
(Source: Getty)

China has lodged a fresh complaint over trade tariffs that Australia implemented in 2014 and 2015, in a fresh blow to the already-fraught tensions between the two nations.

China lodged the complaint to the World Trade Organisation over Australian anti-subsidy and anti-dumping measures on Chinese exports of railway wheels, wind towers, and stainless steel sinks, China’s Ministry of Commerce said in Beijing on Thursday.

Chinese Commerce Ministry spokesperson Gao Feng accused Canberra of derailing the economic relationship.

"It is hoped that the Australian side could take concrete measures to rectify its wrongdoings, avoid confrontational measures, and bring the two nations' trade ties back to normal track as soon as possible," Gao was quoted as saying in state media.

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However, Trade Minister Dan Tehan has declared he would “robustly” and “vigorously defend” Australia’s tariffs.

“China has the right to take this action but we will vigorously defend the duties that we have put in place,” Tehan said on Thursday.

He noted that the tariffs Beijing were complaining about had been in place for more than five years.

“Why they have taken this action now is a question you would have to ask China.”

CANBERRA, AUSTRALIA - JUNE 02: Minister for Trade Dan Tehan during a doorstop in the Press Gallery at Parliament House on June 02, 2021 in Canberra, Australia. (Photo by Sam Mooy/Getty Images)
Australia Minister for Trade Dan Tehan. (Photo by Sam Mooy/Getty Images)

WTO complaint a retaliatory strike, experts claim

China’s complaint comes less than a week after Australia lodged a similar complaint against the 220 per cent tariffs imposed on Australian wine, amid a flurry of several other tariffs that targeted several Australian exports such as lobsters, copper, coal and cotton.

Experts believe that China’s latest move is punishment for Australia’s WTO referral from last week.

“It now looks like China’s complaint to the WTO is in retaliation in relation to Australia lodging its complaint with the WTO,” AMP Capital chief economist Shane Oliver told Yahoo Finance.

“China arguably already felt that it had a case to lodge these complaints on the grounds that they went beyond anti-dumping measures, but held off as the economic impact was relatively minor.

“And then of course, it went down the path of imposing its own trade barriers on Australian products last year, some of which Australia has since lodged a complaint to the WTO in relation to.

“Tit for tat continues.”

Then-Trade Minister Simon Birmingham last December also referred China to the World Trade Organisation over tariffs on Australian barley.

"The actions taken by the Chinese Government have caused serious harm to the Australian wine industry," Tehan said last week.

While he would have “loved” to sit down and resolve the dispute with the Chinese government, Canberra is “not in a position to do so” at the moment, he noted.

“We will use every other mechanism to try and resolve this dispute and other disputes that we have with the Chinese government.”

Talks suspended

Ministerial-level discussions between Canberra and Beijing have been frozen for two and a half years as China’s trade ministers snub Australian government officials.

Planned high level economic talks were also “indefinitely suspended” earlier this year by Beijing who accused Canberra of a “cold war mindset” and “ideological discrimination”.

Tensions between Australia and China have been cooling ever since Canberra rejected Huawei’s bid to roll out 5G in Australia, and plummeted further when Australia led the global call for an independent inquiry into COVID.

Former Treasurer Wayne Swan yesterday told Yahoo Finance that ties between the two nations had changed drastically from the “warmth” he oversaw in his time in government.

“I can certainly say that the relationship now in the last three or four years has been completely different to the relationship that I experienced in my six years as treasurer,” he said.

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