China accuses australia of dumping
China is the top market for Australian wine exports and is also Australia’s largest trading partner.
China’s imports of Australian wine more than doubled to 12 million litres between 2015 and 2019.
Over the same period, the market share of domestic wine fell from 75% to 50%.
China has accused Australian wine companies of dumping and taking market share from local companies.
“The price of Australian wine imports fell 13% to $6.70 a litre”, one Chinese official stated, “we believe this is evidence of dumping, and it is hurting our domestic wine producers.”
China is currently investigating the situation and has stated that it will likely impose anti-dumping tariffs on Australian wine imports.
The tariff is expected to be in the range of 116% to more than 200%.
Shares of Treasury Wine Estates, Australia’s largest winemaker, fell 20% following the news of China’s tariff proposal.
Questions
- Explain one reason why Australian wine exporters would want to dump wine in China? (3)
- Explain one reason why shares of Treasury Wine Estates fell 20% after the news of Chinese tariffs. (3)
- Analyse the benefits of the proposed tariffs for the Chinese economy. (6)
- A tariff is …
- One benefit could be …
- Another benefit…