Tag Archives: trade war

Party over? China’s trade gap threatens Australian winemakers | Australia | Instant News

Adelaide, Australia – As a seasoned wine seller from Australia’s renowned southern wine-making region, David Harris prides itself on one of his country’s best-known products.

“You don’t have to be a genius to know high-quality wine. “It has to jump out of the glass,” he said. “We got the fundamentals right and we did it for a good price.”

One of the countries that has drunk greater amounts of Australian wine in recent years is China.

“They’ve got us drunk outside and at home. We got the highest price we ever got thanks to China, ”Harris, CEO of the South Australian Wine Group, a wine trading and services company, told Al Jazeera.

But the party might end soon.

The widening political rift between Canberra and Beijing extends to trade relations between the two, threatening corporate profits and livelihoods in some of Australia’s most important export industries.

Australian analysts and exporters suspect that China retaliated after Canberra’s actions and statements against Beijing, particularly regarding the latest generation of 5G mobile phone networks and the coronavirus. China hasn’t officially said it will, but the recent moves speak for themselves.

In May, China hit Australian barley with import duties, accusing it of selling its products below cost to gain market share, a process known as dumping, and stopping beef imports from some of Australia’s biggest meat processors.

Earlier this month, Australian lobster came to life awaiting customs clearance in Shanghai. China has suspended some imports of Australian timber, reportedly due to concerns about pests.

Australian copper and sugar exports to China could also be targeted, according to state media.

And in August, the Chinese Alcoholic Drinks Association (CADA) called for retrospective tariffs on Australian wine imports, as part of a dumping investigation, according to Australian winemaker Treasury Wine Estates.

China has become important to the Australian wine industry. In the last financial year, China import $ 850 million (1.17 billion Australian dollars) of Australian wine – 39 percent of the total value of Australian wine exports.

A bottle of Australian wine is on the shelf for sale [File: David Gray/Reuters]

Indeed, China is by far Australia’s largest and most important trading partner. About a third of Australia’s total exports are now destined for the Chinese coast, the market was worth an estimated $ 111 billion (Australian $ 153 billion) in the 2018-2019 financial year. This success in China was partly facilitated by the Free Trade Agreement (ChAFTA) signed in 2015, which deepened trade dependence.

Acid bond

Beijing has denied imposing a speculated embargo, which would flout World Trade Organization and ChAFTA rules. However, on November 4, the spokesperson for the country, Global Times, referenced to “import suspensions,” which further complicate Chinese messaging and create uncertainty.

And on November 12, Wang Wenbin, a spokesman for the Chinese Ministry of Foreign Affairs told reporters, “The causes for the current difficulties in our bilateral relations are very clear… For some time, Australia has violated the basic norms governing international relations, and made up words and misconduct on issues that concern China’s core interests, including those related to Hong Kong, Xinjiang, and Taiwan, and overtly meddling in China’s internal affairs. “

We got the highest price we ever had thanks to China.

David Harris, CEO of the South Australian Wine Group

Beijing-Canberra relations soured in 2018 when Australia became the first country to bar Chinese telecommunications giant Huawei from launching its 5G mobile phone network.

Relations have deteriorated further after Australia led calls for an investigation into the origins of the coronavirus pandemic, which started in the Chinese city of Wuhan. In another move likely to stir tensions, for the first time since 2007, Australia joined the US, Japan and India for the Malabar naval exercise.

China’s growing economic and military power have raised questions about its commitment to an international rules-based order and sparked a more hawkish reaction from Australia and its allies.

Professor Steve Tsang, director of the SOAS China Institute at the University of London, said Australia’s ability to direct its trade interests with China was being tested by its loyalty to Washington’s longtime security ally.

“Australia is definitely caught between the pulling forces of the US-China separation,” said Professor Tsang, “Australia will assess what is in its best national interest and which international partners it can rely on, and between China and the US, it is clear which Australia feels more comfortable. . “


Any embargo on Australian exports to China could be catastrophic. According to Jeffrey Wilson, research director of the Perth USAsia Center at the University of Western Australia, the seven products that have been targeted employ hundreds of thousands and together represent an estimated $ 15.9 billion (Australian dollar 21.9 billion) in exports to China.

That translates to 14.3 percent of Australia’s total exports to China in the 2018-2019 financial year.

Wilson said China’s intention appeared to be spreading disinformation in a bid to destabilize Australian export markets and hit Australia where it was at a disadvantage.

Chinese demand has boosted sales of Australian wines [File: Martin Pollard/Reuters]

“This is a psychological war more than a trade war,” he said, “China has a long history of using trade sanctions of this kind as a diplomatic weapon, and is doing so to ‘set an example’ Australia for various foreign policy actions the Australian Government has taken in recent years. . “

He said Beijing was targeting industries that rely heavily on China as a destination, or products Beijing could easily buy from elsewhere, which is why China has not implemented any punitive measures on iron ore imports.

“The steel industry is structurally dependent on Australian supplies for normal operations, and China’s entire industrial ecosystem is dependent on its steel industry. To sanction iron ore would be a ‘mutually guaranteed destruction’, ”said Wilson.

Greener pastures

An anti-dumping investigation by CADA, expected to be completed in one year, has uncovered three major Australian wine businesses: Treasury Wine Estates, owners of brands including Penfolds; Yellow Tail owner Casella Wines; and Australian Swan Vintage.

“Australian winemakers are fully cooperating. We don’t believe there is any evidence to support dumping, ”said Tony Battaglene, chief executive of the Australian Wine and Wine industry group.

Treasury Wine Estates shares slumped to a five-year low on November 5 on concerns that China will impose retrospective rates.

Battaglene said, “The duties, if assessed, will apply to all Australian wine exporters”.

For winemaker David Harris, the potential for tariffs will go a long way, “It’s about 50 percent of what we do. It will be a very big disaster but we will not be broke; there is a large growth market in India and Southeast Asia ”.

Eric Yang, CEO of Adelaide-based Pacific Vintners, also considered his options, “Of course, tariffs worry me, especially because we are oriented and focused on the Chinese market. In a sense this is a political issue, but it shows that we cannot rely on one market. It’s time to slow down, strategize and plan alternatives. “

This is a psychological war more than a trade war.

Jeffrey Wilson, Perth USAsia Center at the University of Western Australia

Another problem that can irritate Australian winemakers is that consumers in China can now choose to drink fine wine from other countries.

In Beijing, longtime resident Claudia Masueger is the founder of Cheers, a retail wine chain with more than 100 outlets in major cities in China. About a quarter of the wines on offer come from below.

The Swiss entrepreneur said that if tariffs were imposed on Australian brands, his customers might turn to Chilean or Argentinian wine as an alternative.

“It is difficult to predict the outcome of the tariff but it will be sad to see the tax on Australian wine increase. Fortunately, we represent all the major wine producing regions, therefore, we will not face many problems as a business, “Masueger told Al Jazeera.

But beneath a layer of optimism, those whose livelihoods are at stake fear Australia may follow the same path as the United States, locked in a bitter trade war with China.

Trade expert Jeffrey Wilson said Australia’s situation may improve when US President-elect Joe Biden takes on his new role.

“While Trump will be willing to let Australia suffer and ignore it, the Biden administration will see the sanctions as a grave breach of international trade law, as well as a direct economic attack on one of its most important regional allies,” Wilson said.

“By raising the political costs of this action, the Biden administration will likely see China more cautious about imposing sanctions like this in the future,” he added.


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Recent debates have clued Australia into what US elections mean for our future | Instant News

The last presidential debate between Donald Trump and Joe Biden, as many have observed, took place in a universe other than the first.

With less shouting and more substance, there is finally room to look at the very different futures that both candidates offer for the United States and the world.

While doubtful the debate will sway a large number of truly hesitant American voters, there is a lot to watch out for around the world.

The future form of Biden’s government, in particular, is becoming clearer. Given that polls (for what it’s worth) show Biden’s win is much more likely at this stage, it’s an revealing 90 minutes.

Revealing moments for a global audience

President Trump has an unmatched ability to control the news agenda. His tweets, nagging and tantrums dominate daily coverage and Biden is mostly happy to play small targets and let this election contest play out as a referendum on Trump.

In the Nashville debate, however, the President clearly took the advice of stepping back from ridicule and interruption and leaving some scrutiny of Biden’s plans. This has sometimes created awkward moments for the former Vice President as he admits previous policy mistakes here and there and defends his son’s business dealings.

Joe Biden is forced to defend his son Hunter’s business affairs.(ABC News: Jonathan Ernst)

However, Biden is largely making use of the newfound breathing space of this debate to articulate a radically different approach for Trump in everything from managing the pandemic, to the economy and immigration.

However, for an international audience, the most revealing moments relate to the huge global challenges of climate change and China’s rise.

We have a pretty good idea of ​​what Trump’s four more years mean in both areas: a little action on climate change and growing hostility with Beijing.

The Biden positions may not necessarily be new, but when articulated on the big stage ahead of the election they carry extra weight. This is a statement to a large global audience, who will be held to account if he does win.

Moral obligations and existential threats

Biden described the climate change challenge as an “existential threat”. He echoed former prime minister Kevin Rudd in describing humanity’s “moral obligation” to handle it.

The former Vice President maintains a continued reliance on “fracking” (gas) as a transitional fuel, but is on his way to ambitious goals. Indeed, he suggested the policy was “to eventually achieve total zero emissions by 2025”.

This sounds like an even more ambitious target than the Greens. But most likely it stumbled. Biden’s policy is actually a “net-zero by 2050” target, with a “milestone target” set no later than 2025.

After all, Biden promises far greater ambition on climate change than Trump, or even the Morrison Government in Australia.

Joe Biden and Donald Trump stand apart on the blue stage in front of a masked audience.
Joe Biden promises far greater ambition on climate change than Donald Trump.(Jim Bourg / Pool via AP)

Biden wants to “lead the way for every major country to increase the ambition of their domestic climate targets” and pledges to “fully integrate climate change into our foreign policy and national security strategy, as well as our trade approach”. That signals potential trade sanctions for climate abatement.

Just as climate change is causing tensions in the relationship between Tony Abbott and Barack Obama (who used the G20 visit to Australia to highlight the damage to the Great Barrier Reef), it could create awkwardness between Scott Morrison and Joe Biden, if he wins.

The US government fully recommits itself to the Paris Agreement and using its influence to pressure others to stop their game will change the dynamics of the climate debate once again in Australia.

Chinese question

In China, it seems that the animosity between the world’s two great powers will continue to grow regardless of who wins the White House. Far from suggesting a more conciliatory approach than Trump, Biden likens China’s Xi Jinping to the leaders of North Korea and Russia as “thugs”.

He wants to apply more pressure on China and mark a collective effort to rally American “friends” to ensure Beijing plays by international trade rules or “pays the price”.

This suggests continued increased trade and strategic tensions between the US and China and more pressure on Australia to follow US lines. It will not make life easier for the Morrison Government in balancing Australian trade and security interests between these two great powers.

Both Malcolm Turnbull and Morrison have shown a willingness to strengthen Australia’s position on Chinese interference and influence, but they have not gone as far as the Trump administration wants in making Beijing worse.

Whoever wins the White House, Australia will continue to set its own course in managing China’s increasingly difficult relations.

There are many things at stake in this election. Fortunately, the debate in Nashville sheds more light on what that means for our part of the world.

David Speers is the host of the Insiders show, which airs on ABC TV at 9am on Sundays or on iview.


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Australia Dragged Into Trump-Xi Trade War | Instant News

The love triangle has long been a staple for Hollywood soap operas and dramas. Now they are a recurring feature of global agricultural trade too.

China on Monday put an 80.5% tariff on Australian wheat – which is commonly used for brewing beer – said it was sold at an unfair low price with the help of subsidies. The move came just days after China banned beef from four Australian exporters, citing inspections and quarantine violations. Sino-Australian relations are on the decline because …


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