The tariffs are to be in force for 5 years according to China’s Ministry of Commerce. Australia has said there’ll be no “trade war”, which at this point sounds more optimistic than realistic.
The Ministry denied that the tariffs were imposed on the basis of Australia’s call for an inquiry into the pandemic. The Chinese ambassador made a statement that is almost the exact opposite a week or so ago. China has since agreed to a WHO-led inquiry, so it’s anyone’s guess what these tariffs are supposed to achieve relative to that issue.
A strangely wrong saga
Readers may be interested to know that the “dumping” accusation is, to put it mildly, a bit off target:
1. Thanks to the drought, our grain exports to China were way down in 2019.
2. Australian grain exports don’t cruise up and down the coast of China looking for buyers. It’s done under contract and/or through the Chinese distribution framework. Dumping isn’t even feasible.
3. If dumping was a problem, wouldn’t someone in authority in China have mentioned it long ago? Why wasn’t it raised with the Australian government?
4. Chinese customers will have to buy elsewhere, probably at higher prices, to get very much inferior quality products. Or they’ll have to pay the tariffs, which is extremely unlikely. They lose both ways.
Some history
Fascinating, isn’t it? No, it isn’t. It’s annoying. As public relations, it’s been a disaster already. We just had 3 months of bushfires, a gigantic drought, a pandemic, and now we get this nonsense. Australia’s response to the tariffs could be easily summed up in “Screw this.”
There’s a history here – Australia, in fact, was the first Western nation to open up trade with the People’s Republic of China. Prime Minister Gough Whitlam preceded Richard Nixon in opening trade relations by about a year or two. China was just coming out of the Cultural Revolution, and trying to get back on its feet. Trade was important to ensure movement of goods and capital to fund China’s rebirth.
We’re not pinning medals on ourselves for doing business with 20% of the world’s population or basically ending the Cold War style trade situation. It’s always been good business for us. The relationship between two very different societies has had to be evolved, with the odd disagreement.
…But never anything as blatantly false and utterly political as these tariffs. Pulling a non-existent argument and accusations out of a hat and calling it policy isn’t exactly the usual Chinese style.
Penalising Chinese businesses, as well as our growers, with these tariffs is an almost Trump-like move. It’s irrational and totally counterproductive. It seems very insecure, too. Is China really that worried about an inquiry into the pandemic? If so, why?
Trump hasn’t supported our call for an inquiry, because it won’t be on his terms. We’re talking science and trying to get a grip on managing this virus; he’s talking about re-election and trying to be seen to be a world leader. It’s debatable whether we care about getting US support or not, under these typical bizarre circumstances.
The bottom line here is that we’ve had quite enough of tariffs from anywhere. This highly selective, almost vague beyond belief reasoning is of no interest to us. We can sell the barley and anything else you care to name elsewhere. We’re doing business here, what about you?
Let us know when you’re ready to talk business, China. To hell with the politics.
