China slaps duties of up to 218% on Australian wine for 5 years

China is slapping massive duties on wine from Australia for the next five years, a move that threatens to deprive the country’s winemakers of their top export market and escalate a trade dispute.

The duties, which range from 116% to 218%, were announced Friday and come after an investigation by Chinese authorities found instances of “dumping and [market] damage.” They take effect on Sunday.

Australian Grape & Wine Chief Executive Tony Battaglene told Bloomberg Friday that the industry group will likely recommend making a complaint to the World Trade Organization. China was, until recently, the largest market for exports of Australian wine.

Relations between Australia and China began to deteriorate last April after Prime Minister Scott Morrison called for an international investigation into the origins of the coronavirus. A number of Australian exports — including timber, beef and some types of coal — soon began to encounter difficulties entering the Chinese market.

Chinese investment in Australia plunged to just over 1 billion Australian dollars ($763 million) in 2020, down 62% from the previous year, according to a report released earlier this month by the Australian National University’s Chinese Investment in Australia Database.

Australia’s wine industry has been at the center of the storm. The Chinese Ministry of Commerce imposed temporary tariffs of up to 212% on Australian wine imports in November following an anti-dumping investigation.

The value of exports of wine to China dropped to almost zero in December, according to statistics from industry group Wine Australia.

— Laura He and Ben Westcott contributed reporting.