Updated ,first published
Australia’s trade and agriculture ministers have condemned China’s shock decision to impose new tariffs that could cost the beef industry $1 billion a year.
China, the world’s biggest importer of beef, overnight set the new import duties of 55 per cent above a certain quota to protect its local farmers from international competition of major export nations including Argentina, Brazil and Australia.
Trade Minister Don Farrell said the government had told China the move to curb Australian exports was unnecessary.
“We have made it clear to China that Australian beef is not a risk to their beef sector, and that we expect our status as a valued Free Trade Agreement partner to be respected,” Farrell said.
Agriculture Minister Julie Collins said she had “serious concerns with this decision by China”.
“The Albanese government is working closely with the Australian beef industry to determine the full implications of this measure.”
The new tariffs will apply to all imports into China, from any country, once China receives its annual quota of 2.7 million tonnes of beef imports, just short of the 2.9 tonnes it imported in 2024.
Australian farmers fear that red meat powerhouse Brazil could move fast to flood the lucrative market and grab most of the market share under the quota, leaving nations such as Australia to cop higher tariffs.
The Australian Meat Industry Council warned the measures could slash local beef exports to China by about a third from recent levels, hitting trade worth more than $1 billion.
“This decision will have a severe impact on trade flows to China over the duration of the measures’ enforcement,” said chief executive officer Tim Ryan. “Imports of Australian beef are not a cause of damage to the domestic beef industry in China.”
Australia shipped 266,000 tonnes of beef to the Chinese market in the 12 months to the end of November, according to the industry council’s figures, which comprises roughly eight per cent of China’s beef imports.
The new quota was introduced after a 12-month investigation by China, which found that rising imports had undermined local producers. This means the action is permitted under World Trade Organisation rules, which sanction so-called safeguard measures to protect domestic industries.
Prime Minister Anthony Albanese on Thursday was more circumspect than his ministers, saying Australia had not been singled out by China, and added he was optimistic about the beef industry’s prospects in new markets.
“This is an announcement that is across the board,” Albanese said.
“Australian beef is in my view, proudly as the prime minister, the best in the world. Our products are in great demand right around the world, and we expect to continue.”
Opposition Leader Sussan Ley said China’s trade restrictions were a test of the Albanese government’s diplomacy.
“What the prime minister needs to do is leverage the very good relationship that he tells us he has with President Xi, and make sure he makes contact, and makes it very clear that Australia should not be included in any of these arrangements,” Ley said.
Victorian Farmers Federation president Brett Hosking said Australian exporters would have to seek new markets for beef when China’s tariffs kick in. This would squeeze profit margins, he said, but deliver good news for Australian shoppers.
“For the average Australian, when they walk into the supermarket, they may get to enjoy some of that premium beef that would have once gone to China,” he said.
“That could be seen as a good thing, but we want farmers to be rewarded for what they produce too.”
Robert Mackenzie, a beef producer that runs Macka’s Pastoral north of Newcastle, said the quota announcement was “devastating” for his business, which counts Chinese buyers among his top customers.
“This has hit us like a tonne of bricks,” Mackenzie said. “I can understand why the Chinese government might want to make their local beef more accessible for local consumers, but I’m not sure this is the right way to go about it.”
Cattle Australia, the peak body for graziers, agreed with the forecasted $1 billion loss of exports to China and said the quota system would restrict access to reliable meat products.
Chairman Garry Edwards said China’s restrictions breached the spirit of the free trade deal with Australia, and demanded an explanation for the decision.
“We are deeply disappointed by this decision – a decision we believe to be entirely unwarranted and at odds with the sentiment of the free trade agreement we share,” said Edwards.
In 2020, China imposed $20 billion of trade sanctions as an act of political retribution against the Morrison government with bans on barley, wine, lobster, timber, major beef exporters, timber and cotton.
It cited labelling and health certificate requirements as reasons for the beef bans, and claimed biosecurity issues were the reason for the lobster, cotton, barley and timber restrictions.
The restrictions came in response to then-prime minister Scott Morrison’s push for an independent coronavirus inquiry.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.