CHINA's decision to impose anti-dumping tariffs to double or triple the cost of imported Australian wine is the latest bullet in a growing trade war that is as much about global politics and China's place in the world as the landed cost of vintages exported from the Hunter and other wine-growing regions.
China announced its intention to investigate Australian wine imports in August. Now, announcing "temporary" tariffs of between 107 per cent and 212 per cent, it says it has made its ruling "in strict accordance" with its own domestic law and the rules of World Trade Organisation.
Australia sells an estimated $1.2 billion worth of wine each year to China, which equates to about half of the industry's total exports.
Shares of the listed winemaker Treasury - owner of the prized Penfolds label - fell by more than 11 per cent yesterday morning, and the Chinese action comes at a critical time for east coast winemakers who lost a lot of last year's grapes to bushfire and smoke damage.
Trade Minister Simon Birmingham was quick yesterday to defend the reputation of the Australian industry, saying the idea that Australia "somehow subsidises" winemakers to "dump or sell its product below costs on international markets is a falsehood".
That may be the case - and the ongoing delays facing Australian coal ships anchored in Chinese ports, and the tariffs on barley announced in May - certainly add to the perception that China is using trade as a political weapon.
But Australia is also an active participant in WTO processes.
The WTO website lists nine active cases in which we are the complainant - including one concerning access to Canadian wine markets - and 16 in which we are the respondent.
Additionally, we have our own Anti-Dumping Commission.
Its latest report notes that at September 30 we had 79 measures in force across 22 countries and 27 commodities, comprising 68 dumping measures and 11 countervailing measures.
China "doves" will see this latest move as evidence of a need for Australia to tread more carefully in its relations with its biggest trading partner.
China "hawks" will push the opposite message - that China is attempting to ride roughshod over Australia as America's Indo-Pacific ally.
Either way, cheap wine does not necessarily mean dumped wine.
But the difference, like the taste of wine itself, may well be in the palate of those doing the tasting.
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