China launches second Australian wine probe as tensions rise by Bloomberg

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© Reuters.

(Bloomberg) –

Australian winemakers have been hit by a second Chinese government investigation, as trade tensions between countries escalate.

China has opened an anti-subsidy investigation into Australian wines in containers of two liters or less, according to a statement on the Commerce Department’s website. The announcement comes less than two weeks after China, Australia’s largest international buyer of wine, announced it had launched an anti-dumping investigation into the same product.

The investigation is the latest blow to Australian industry, which has been hit by slowing demand amid global Covid-19 lockdowns, drought-stricken vintages, as well as smoke and damage. by the unprecedented bushfire season in the country last summer.

Industry group Australian Grape & Wine said China had previously flagged the possibility of an anti-subsidy investigation and the industry was well positioned to respond. He would cooperate fully throughout the investigation process.

The ties between the two trading partners have become increasingly frayed in recent years. In addition to banning Huawei Technologies Co. from participating in Australia’s 5G network, pressure from Australia for an independent investigation into the origins of the Covid-19 epidemic has sparked a Chinese backlash.

China halted some beef imports earlier this year after a fifth meat plant was banned from shipping products there last week.

It also imposed tariffs of over 80% on Australian barley exports in May after previous anti-dumping and anti-subsidy investigations were concluded. In addition, the Chinese ambassador to Canberra said in April that Chinese consumers may choose to boycott the country’s exports due to strained relations, a comment seen as a threat in Australia.

The investigation into the wine subsidy is due to end on August 31, 2021 and can be extended until February 28, 2022, according to the statement.

(Add more detail in third paragraph, Australian Grape & Wine commentary in fourth)

© 2020 Bloomberg L.P.

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