How China’s trade attack on Australia is failing

There is no doubt that China’s recent trade attacks have hit Australia hard, but the sanctions also come at a price for Beijing, and the nation is already experiencing some of the negative impacts.

China has introduced tariffs and bans on a variety of Australian imports, including wine, barley, lamb, beef, charcoal, lobster and timber, in fear that more industries may be in the line of fire.

While Australia is clearly suffering from the attacks, experts warned that China will not emerge unscathed from this fight.

Earlier this year, China imposed a five-year 80 percent tariff on AU $ 600 million of annual barley exports from Australia over dumping claims.

Australian Trade Minister Simon Birmingham has strongly denied these allegations and has repeatedly called on China to resolve the matter.

Earlier this year, Birmingham also suggested that the tariffs would also prove detrimental to Chinese consumers, pointing to an investigation by the Australian Bureau of Agricultural Economics and Resource Sciences (ABARES).

The models showed that Australian farmers would likely suffer a loss of around AU $ 330 million, while China could see a loss of AU $ 3.6 billion due to its reliance on Australian quality barley to brew beer.

“With Australia’s agricultural production diverted to other activities, exports of other agricultural products in 2025 are expected to increase,” the ABARES report said.

“This means that the value of Australia’s total agricultural exports (to all countries) would decline less than what is lost in trade with China.”

The report claimed that the tariff on Australian barley would cause Chinese buyers to switch to alternative sources of barley for malt, which would likely result in lower profitability of their products.

“The need to find alternative barley supplies leads to increased demand for Chinese-grown barley. In response, Chinese agriculture is shifting towards a less efficient production mix of coarse grains (maize and barley), further exacerbating plus the effect of the tariff, “says the report.

Other negative impacts that China may not have expected have already started to show in other areas.

Since October, Australian coal has been unofficially banned in China, and steel mills and power companies are said to have been told not to buy our thermal coal.

This has caused the price of Australia’s premium hard coking coal to drop 22 percent since October, global price reporting agency Argus reported.

But China appears to have created some self-harm as a result of this attack, as the country relies on coal to fuel its steel industry.

Last week, the price of coking coal in China soared to a four-year high, attributed to delays in coal supply from Mongolia, the largest coal supplier to China alongside Australia.

Additional health checks have been required for truck drivers hauling coal from mines in the Gobi desert due to the coronavirus and this has slowed down the customs process.

But analysts at Chinese financial information portal Hexun Futures pointed out in a December 1 update that restrictions on Australian coal had also contributed, along with stricter measures around oversight of coal mine safety.

The situation has caused the prices of coal produced in China to skyrocket, forcing China to turn to other countries and pay a much higher price than it would pay for Australian coal.

Experts have also suggested that by punishing Australia, some key international allies could also turn against China.

China’s attacks on Australia escalated after Prime Minister Scott Morrison called on the country to allow an independent investigation into how the Covid-19 virus first appeared in Wuhan.

Nanjing University professor of international relations Zhu Feng told Bloomberg that the bans and tariffs were not only a punishment, but also a “cautionary alarm” for other countries that might oppose China.

However, this heavy-handed approach could have the opposite effect.

“China against any individual country, including quite powerful countries like South Korea or Thailand or even Japan, China would be dominant,” former British Foreign Secretary Malcolm Rifkind told the publication.

“But in the real world, when you have a situation like this, your potential victims come together to ensure a collective and coordinated response.”

Australians have also been called upon to boycott Chinese goods this Christmas, in an attempt to counter the country’s sanctions.

One Nation frontman Pauline Hanson renewed boycott calls last week, urging Australians to think about who they choose to support the holidays.

“You might think it’s terribly difficult, yes, it’s difficult, I get it,” Hanson said in a Facebook video.

“We all have our part to play in this. Think about it when you buy that furniture, that toy, that food, whatever you buy, take a look at where it comes from, and if it’s China, let it sit on the shelf.”

Kennards Self Storage CEO Sam Kennard also called to arms for Australian companies to defend themselves by eliminating suppliers from China.

“It has proven difficult to trust the Chinese communist government,” Kennard told NCA NewsWire.

“They have put tariffs on lobster, wine and barley out of revenge or spite and the risk is that you don’t know who’s next.”