China removes tariffs on Australian barley

Australia has said it’ll end a case against China at the World Trade Organization, after Beijing agreed to lift its tariffs on Australian barley.

China imposed various tariffs on Australian goods in 2020 after Canberra called for an international investigation into the origins of Covid-19. But Australia stood its ground and called the tariffs “economic coercion”.

After a new Australian government ushered in a “stabilisation” of China relations last year, speculation grew that Beijing might hit ctrl-z on its tariffs. That’s now happened with barley, and Australia is hoping wine is next.

Intrigue’s take: While painful for specific producers, Australia’s economy mostly shrugged off the tariffs imposed by its largest trade partner. That’s partly because barley growers found new markets to hawk their grain.

But it’s also partly because China kept buying vast quantities of Australia’s top export: iron ore. So the immediate story here may be one of resilience. But there’s a longer term story here about vulnerability, too.

Also worth noting:

  • Australian barley has mainly been used in animal feed and beer production in China.
  • As tensions between Australia and China escalated in 2020, China’s embassy passed to the Australian media a list of 14 ‘grievances’ that Beijing had with Canberra.