Australia Anticipates Lifting of Chinese Barley Tariffs as $1.2b Trade Decision Deadline Approaches

The federal government of Australia is hopeful that Chinese tariffs on Australian barley exports will soon be lifted. The move is eagerly anticipated, although official word from Chinese authorities is still pending. These tariffs, which were imposed in May 2020, effectively halted the trade, causing significant financial damage to Australian growers, with losses amounting to $1.2 billion.

The tariffs were a response to concerns raised by China regarding the dumping of cheap grain. In response, Australia took the case to the World Trade Organization (WTO), a move that was suspended this year in April, just as a verdict was expected.

Australian authorities have stated their preference to resolve the issue bilaterally and have given the Chinese government a period of three months to respond. This deadline was later extended by a month, leading to a new response deadline of August 11.

According to Assistant Minister for Trade Tim Ayres, he expects China to lift the tariffs that have been imposed on barley. “I expect all of these impediments to be removed,” he said. Ayres also made it clear that there is no willingness to extend the deadline any further. He went on to criticize the negative impact of these tariffs on Australian barley exporters and certain communities, as well as the Chinese beverage industry.

Ever since the tariffs were introduced, grain growers have been on a quest to find new markets for their barley. The introduction of the tariffs led to a $30-40/tonne drop in the price of barley. Therefore, resuming trade with China could potentially cause prices to rise significantly, delivering a substantial boost to the sector.

Andrew Weidemann, a Victorian grain grower and spokesperson for Grain Producers Australia, recalled that at the peak of the trade, 6 million tonnes of barley were exported to China. “I don’t think it will get back to that, but I just hope politicians on both sides can get the deal done,” he said.

While Weidemann acknowledged that the industry was initially not supportive of the decision to escalate the issue to the WTO, he also conceded that if negotiations fail, the case may need to be taken back to the international trade body.

Currently, Chinese buyers are paying higher prices for lower quality barley from other countries. According to Weidemann, there is significant interest in Australian barley from the Chinese market, making the removal of the tariffs crucial.