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China puts additional tariffs on Australian beef

03 July 2020

China has increased tariffs on Australian beef imports and hints at increased tariffs on whole milk powder later in 2020.

According to a story from ABC News, the duty on beef would jump from 4.8 percent to 12 percent for the rest of 2020.

Australian meat analyst Simon Quilty explained that the increase will withdraw the preferential tariffs agreed under the China Australia Free Trade Agreement (ChAFTA), triggering a Special Agricultural Safeguard (SSG).

This year the safeguard was set to 179,687 tonnes of beef, a volume that was met on 30 June.

Despite Australia triggering the safeguard, a spokeswoman from the Department of Agriculture said that June was the earliest that preferential tariffs have been dropped since ChAFTA was enacted in 2015.

“The unprecedented growth of Australian beef meat exports to China in the year to date mans that the volume has reached the threshold already this year,” she said.

“Forecast data shows the SSG for whole milk powder is likely to be triggered later this year also.”

Mr Quilty told ABC News that the impact of the increased tariffs is already being felt across Australia’s beef industry.

“New Zealand and Costa Rica are now on zero tariffs [into China], but Brazil, Argentina, Uruguay and Canada are all on 12 percent,” Quilty said.

“Chinese importers have already asked Australian exporters to either renegotiate contracts already in the system or, in some instances, have looked to cancel contracts, which we know is a real no-no in the market place.”

Quilty explained that the Chinese economy is struggling, and the ability of importers to pass the higher cost duty onto Chinese consumers is nearly impossible.

He expects the preferential tariffs to be reinstated from January 2021 before being completely removed under ChAFTA by 1 January 2024.

Read more about this story on ABC News.



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