Coronavirus News Asia

China, Australia edge towards Covid-19 trade war

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SYDNEY — Australia’s call for an investigation into China’s role as the origin of the Covid-19 pandemic is quickly morphing into a trade war, one that could have unhealthy impacts on both sides.

Australian Trade Minister Simon Birmingham is seeking talks with counterpart Zhong Shan after Beijing moved earlier this week to block imports of Australian barley and beef.  

“You’ve got hundreds of thousands of people who’ve died, millions who’ve lost their jobs and billions who’ve had their lives disrupted, the least the world can expect is that there be an investigation and Australia’s far from a lone voice in advancing that,” Birmingham said today (May 13).

At the same time, Australia will continue to put the squeeze on China over its handling of the Covid-19 virus despite the risk of further trade retaliation from Beijing, confident perhaps that it now has support from key Western allies including the United States.

“I was very clear that in no way would Australia change our public health policies or our national security policies or any of our policy positions under threat of economic coercion and that remains very much the case.”

Australia Trade Minister Simon Birmingham puts on a brave face amid China trade threats. Image: Twitter

China has cited alleged technical breaches of trade rules for its decision on Tuesday to suspend beef shipments from four meat abbatoirs, including one with Chinese ownership, and its earlier threat to slap higher duties on Australian barley exports. Barley farmers could face tariffs of up to 80% if China makes good on its threat.

Australia’s barley shipments to China, used mostly for making beer, are worth about US$1 billion a year. The beef ban will affect about one-third of the country’s exports to China, with an annual value of US$800 million.

An anti-dumping dispute over Australian barley exports has been rumbling for 18 months and was set to be resolved this month.

Beijing has used apparent technical trade violations in the past as a political and diplomatic lever, and had issued veiled threats of reprisals in late April over Canberra’s call for a virus probe.

Australia’s wine and dairy industries believe they could be next in line for retaliation, followed by the education and tourism sectors. China is Australia’s top trade partner, buying US$88 billion worth of goods in 2018.  

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