China slaps tariffs on Aussie beef for the next six months

Tariffs on Australian beef into China will jump from less than 5 per cent to 12 per cent for six months, with increases also expected on whole milk powder as preferential tariffs are withdrawn.

Jul 02, 2020, updated Jul 02, 2020
The costs of selling Australian beef to China has jumped as preferential tariffs are dropped for the remainder of 2020. (Photo: ABC)

The costs of selling Australian beef to China has jumped as preferential tariffs are dropped for the remainder of 2020. (Photo: ABC)

Australian meat analyst Simon Quilty said, from this week, the duty on beef would jump from 4.8 per cent to 12 per cent for the remainder of 2020.

Under the China Australia Free Trade Agreement (ChAFTA) preferential tariffs are withdrawn once a Special Agricultural Safeguard (SSG) is triggered.

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

Despite Australia triggering the safeguard for the past two years, a spokeswoman from the Department of Agriculture said that June was the earliest that preferential tariffs have been dropped since CHAFTA was established in 2015.

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

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

‘The economy in China is struggling’

Quilty says the impact of the increased tariffs is already being felt in the Australian beef industry.

“New Zealand and Costa Rica are now on zero tariffs [into China], but Brazil, Argentina, Uruguay and Canada are all on 12 per cent, and we are as well,” he 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.

“The ability of the Chinese importer to pass this higher cost duty forward to the consumer in China is almost impossible.

“The economy in China is struggling and we’re finding lower prices each day for meat products, right across the board.”

The preferential tariffs will be reinstated from January 1, 2021 before being completely removed under ChAFTA from January 1, 2024.

The Agriculture Department says the change in tariffs is “not related in any way to other trade issues or COVID-19”.

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Minister hopeful abattoirs can resume trade

The Australian Government is currently considering how it will respond to a decision by China earlier this year to impose an 80 per cent tariff on Australian barley.

It has also been a difficult few months for beef exporters after China imposed a ban on four Australian abattoirs.

On Wednesday, Agriculture Minister David Littleproud said the Government had no indication of when those abattoirs would be permitted to export to China again.

“China is under no requirement to make a response straight up,” Littleproud said.

“We’re working through the translation of our document [responding to the bans] into their language as quickly as we can.

“We’re hoping they’ll come back to us in the near future and remove those temporary bans.

“We’ve been able to rectify those things that they believe those abattoirs have done wrong.”

– ABC / national rural reporter Kath Sullivan

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