Is US China trade war hurting Australia?
Team Veye | 25-May-2020
There have been ongoing concerns that the US President’s trade deal with China could hurt Australian farmers and exporters.
In the past few weeks, China has suspended the import of beef supplied by four Australian abattoirs and imposed crippling tariffs of about 80% on Australian barley imports.
China is an important market for Australian products including wool, cotton and dairy. Australia’s two-thirds of farm production is being exported, of which, one third is to China alone. The Country exports 49% of its barley and 18% of the beef production.
Earlier this year, in January, China had agreed to buy an extra $200 bn of American farm products over two years as part of an agreement between them.
Just when Australian barley exporters were trying to stop the imposition of new tariffs, China announced that it would immediately allow barley imports from the US.
China has also passed a string of new regulations on Australian imports. With China’s new ore regulations looming large what could be anticipated by Australian exporters as Australia has lucrative minerals export trade going with China.
It has also been in the news that the Chinese government is asking state-owned power utilities not to buy new cargoes of Australian thermal coal and rather to buy domestic coal instead.
However, in some cases, both the Government and the mining industry were of the view that the new regulations were likely to actually help Australian exporters by streamlining the import process.
Similarly, the decision about coal imports could have been aimed at helping China’s domestic coal miners. China has since long been our customer. They know and value the quality of our coal and our iron ore. For their steel mills and other energy needs, what could be better than our well known and well-evaluated products.
Australia has a two-way relationship with China. China needs Australia as much as Australia needs China.
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