When the going gets tough, the tough get going and China’s kick-in-the-pants tariffs of 2020 and 2021 that imposed higher prices on our wheat, barley, lobsters, wine and others (that KO’d the market for Australian producers) has turned out a plus for exporters! But the imposition of Beijing’s unfair trade barriers actually paid dividends, with the action leading to our producers finding new markets to replace Chinese customers.
Speaking this week at the Daily Telegraph’s Bush Summit, Trade Minister Don Farrell told our farmers that he hopes they keep looking for new markets, even though China’s tariffs have been lifted.
The Minister was also happy to reveal that our exports and the prices they fetch are now bigger and higher than they were when the tariffs were imposed. “In June alone, Australia exported $1.76 billion of goods previously affected by trade barriers to China, including $8.8m in timber logs, $148m in cotton, $182m in beef and $6.8m in hay,” The Tele’s Clare Armstrong reports. “Barley exports reached $194.2m for the month, a huge turn around on the zero at the same time last year when Beijing’s 80.5 per cent anti-dumping and countervailing duties were still in force.”
It's also been good for wine, with sales of $149.6 million in the month of June. This follows $86 million of sales in May, which was the first month of business after the tariffs were removed.
In case you forgot, these slugs were as high as 220% and effectively took our $1.1 billion worth of trade to China in 2019-20 to close to zero!
Farrell says our farmers have to exploit our ‘clean and green’ image that Chinese consumers like and pointed to the success of our beef sales to the UK post-Brexit when the ties to the EU changed. Now our beef exports to the UK are up 500%!
The Minister pointed to both India and the UAE as our new growth partners, which ultimately reduces our excessive dependence on China as a trading partner.
Of course, he didn’t refer to a potential looming problem for our exporters if Donald Trump wins the US election in the first week in November. The former President hasn’t hidden his determination to take on China because of its restrictions on US exports. So, a resumption of the Trump trade war looks a certainty if he takes control of the White House again.
In doing so, Trump will pressure Australia to support him. This could become not only a big trade challenge next year for our exporters and the Albanese Government, but it could also be a huge election issue as well.
Remember, these Chinese tariffs followed the Morrison Government’s alignment with then President Trump, and I’m sure many of our exporters, even with these newfound customers, wouldn’t want to see a rerun of the tariff slugs of 2020-21.