China’s Tariffs on Australian Barley: Coercion, Protectionism, or Both?

Australian barley exports to China worth AU$1.4 billion (US$960 million) were shaken in October 2018 when China opened an anti-dumping investigation. The trade came to a grinding halt in May 2020 when China imposed tariffs totaling 80.5 percent.

The case has been widely reported as economic coercion (against Australia’s call for an inquiry into COVID-19), retaliation (for Australian anti-dumping measures against China), and a “trap” by China (to shore up steel exports).

However a new research report argues that these factors are really just triggers for a measure that China wanted to take anyway. In the case of the barley tariffs, the underlying driver is food security. High Australian barley exports over the 2010s became a serious threat to China’s food self-sufficiency and import diversification policies, which it arrested through a dubious anti-dumping case. In other words, the barley tariffs are a classic case of protectionism.

Accession to the WTO has reduced quotas and tariffs on agricultural imports but, with a history of conflict and famine, China remains preoccupied with food security. This was heightened in the global food crisis of 2008, when Chinese policymakers were convinced that the world had entered into a new era of food shortages and inflation. China now has the highest and most volatile levels of agricultural protection in the world, compared to other economies where levels are steadily declining (Figure 1). Australia has the lowest levels in the OECD.