Australia will 'vigorously defend' its wine industry against China, minister says

Australia will "vigorously defend" its wine industry as it faces higher tariffs from China, the country's agriculture minister said.

"While China … may want to play games with respect to market mechanisms, we have the opportunities to send this product into other markets because of the quality of it," David Littleproud, Australia's minister for agriculture, drought and emergency management told CNBC's Will Koulouris.

China's Ministry of Commerce announced Friday that it will impose anti-dumping duties some Australian wine imports from March 28. Beijing claims that Australia has been dumping and subsidizing its wine exports, which has hurt China's domestic wine sector as a result.

"We're just deeply disappointed with this decision, and we don't subsidize our farmers," Littleproud said. "Of the 37 OECD (Organisation for Economic Co-operation and Development) countries in the world, there's only one country that is seen to subsidize their farmers less than Australia," he said without providing further details.

"Australian wine is the second highest price point wine in China," the minister said. "You don't go and dump a high quality product … into a market such as China."

We want to be mature about this and when they're ready to talk ... on the basis of what we've provided to them, then we'll be there for them. But until they're prepared to do that, it'll be very difficult.

David Littleproud

Australia's minister for agriculture, drought and emergency management

Relations between Canberra and Beijing soured after Australia supported a call for an international inquiry into China's handling of the coronavirus, which was first reported in the Chinese city of Wuhan.

Since then, China has taken a range of measures that impede Australia's exports to the country including anti-dumping and anti-subsidy duties on Australian barley and an import ban on several red meat abattoirs. Other products that have been caught in the crossfire of tensions between China and Australia include lobsters, cotton, coal and iron ore.

Australia is one of the few developed nations in the world that exports more than it imports to China, and Canberra has asked the World Trade Organization to mediate a dispute over duties on the country's barley in the Chinese market.

For his part, Littleproud said he has reached out to his counterpart in China asking for dialogue.

"We're not gonna throw our toys out of the cot. We want to be mature about this and when they're ready to talk ... on the basis of what we've provided to them, then we'll be there for them. But until they're prepared to do that, it'll be very difficult," he said.

— CNBC's Saheli Roy Choudhury contributed to this report.

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