Australia threatens WTO action as China hikes duty on wine

Australia has threatened to take an action against China over its "unjustifiable" decision to hike duties on wine imports for up to five years.

"We will be looking at next steps, and those next steps will include looking at taking this matter to the World Trade Organisation," Australian Trade Minister Dan Tehan said on Saturday.

In the latest salvo between Beijing and Canberra, China's commerce ministry announced levies ranging from 116.2 per cent to 218.4 per cent would be slapped on Australian wine imports from Sunday.

Tehan, to this end, said the tariffs meant it was "basically impossible" for their wine to be competitive in the Chinese market.

"This decision which has been taken by the Chinese government is extremely disappointing and completely unjustifiable," Tehan told reporters in Melbourne.

On Friday, the Chinese commerce ministry said it was imposing the duties after an investigation found "dumping and subsidies on imported wines" from Australia impacted the Chinese market.

Wine exports to China hit a record A$1.3 billion (US$900 million) in 2019, according to Australian government data, making it the biggest market by value for the product.

Late last year, Australia also called for the WTO to investigate Chinese tariffs on barley imports, following a series of economic sanctions or disruptions to Australian products to China's vast market.

Diplomatic relations between the two countries have reached their lowest since the deadly 1989 Tiananmen Square crackdown.

Australian Prime Minister Scott Morrison, speaking in Sydney, accused Beijing of using the tariffs as "retaliation". He added Australia stood with British Prime Minister Boris Johnson after China imposed sanctions on several people in the UK and EU over their vocal support for the Uyghur Muslim minority in Xinjiang, where Beijing is accused of abuses.