As trade tensions with China heat up, one industry analyst has warned more Australian industries could soon be hit with tariff disruptions.
Relations between the two countries have soured in recent years, with China – Australia’s biggest trade partner – threatening economic retaliation since Prime Minister Scott Morrison led a global push for an inquiry into the origins of the coronavirus pandemic.
The increasingly strained relationship has already seen China impose tariffs on Australian goods and services including wine, beef, seafood and barley this year.
IBISWorld senior industry analyst Liam Harrison said honey, dairy, fruit, pharmaceuticals and mining exports could be next on the list due to their exposure with the Chinese market.
Mr Harrison said the industries should be on “high alert” for being targeted by tariffs amid the current trade tensions.
“[For] these industries, becoming increasingly reliant on China as an lucrative market has also put them at greater and greater risk,” he told SBS News.
“Any loss of revenue is bad particularly at a time of economic hardship across Australia – when consumption won’t necessarily be able to pick up domestically.”
The recent trade disputes in Australia’s relationship with China have prompted widespread uncertainty for Australian exporters and triggered debate over their reliance on the country’s major trading partner.
The relationship has also been marred by diplomatic disagreements stemming from China’s grievance over foreign interference laws, the banning of Huawei from the 5G network and speaking out on human rights concerns.
These tensions were again exposed after a Chinese foreign ministry spokesperson shared shared a Twitter post containing a doctored image of an Australian soldier holding a knife to the throat of an Afghan child.
China accounts for around 28.8 per cent of Australia’s two-way trade in goods and services, according to IBISWorld research.
Two-way trade between China and Australia reached a record $252 billion last year.
Trade Minister Simon Birmingham said the government continued to support the resilience of Australian exporters by helping them access a range of trade markets.
“We stand alongside them … to help them grow their exports which they have done across a range of markets,” he told the Senate on Tuesday.
Trade Minister Simon Birmingham says the government continues to support the resilience of Australian exporters by helping them access a range of trade markets.
SBS News
But amid calls for exporters to diversify their markets, Mr Harrison said many businesses could find this difficult in the short term due to the challenges of the COVID-19 pandemic.
“Being unable to short-term diversify causes significant issues,” he said.
“The loss of revenue can hurt these industries a lot … with COVID-19 affecting industries across Australia.”
Exporters worried about increasing trade tensions with China
Last month, China imposed tariffs on all Australian wine ranging from 107 to 200 per cent after launching an anti-dumping investigation into Australian wine in August. The Australian government has denied the allegations of wine dumping, describing them as “perplexing”.
Tony Battaglene, chief executive of Australian Grape and Wine, said the tariffs were deeply concerning, as were reports of wine shipments being stopped at the Chinese border.
“The industry is still in a state of shock – they are very worried about what’s going to happen in the future,” he told SBS News.
“The Chinese market is our biggest market by far … anything that impacts on that market is going to impact on every grape and wine producer in Australia.”
Australia has flagged it could seek to address some trade disputes that have arisen before the World Trade Organisation despite China’s insistence their complaints are justified.
Earlier this year, China imposed tariffs on Australian barley companies. It has also suspended beef imports from several abattoirs, including Australia’s Meramist Pty Ltd which became the sixth supplier to face such a move by the Chinese government on Tuesday.
National Farmers Federation (NFF) CEO Tony Mahar has said the federal government must continue to work towards resolving the trade disputes.
“Keep trying, keep talking, keep looking for opportunities to address these issues one by one and don’t give up – it’s too important for Australian farmers,” he told reporters.
