China drops tariffs against Australian winemakers in major breakthrough – after Beijing slapped $20BILLION in trade sanctions as relationship between two nations soured

China will remove punitive tariffs against Australian wine producers after a months-long review.

Beijing moved to remove the tariffs on Thursday, but the decision was put on hold on Sunday.

It had agreed to a five-month review of tariffs in exchange for Australia suspending a dispute against it at the World Trade Organization.

An interim report from an investigation launched by Beijing into the measures recommended that the tariffs be removed.

Trade in 2019, before the tariffs came into force, was worth $1.1 billion a year and would likely increase when restrictions were lifted, Prime Minister Anthony Albanese said during a trip to a winery in Pokolbin on Thursday.

“We believe that the resumption of trade, which we believe is imminent, will be even greater because that is what we have seen with other products that have resumed,” he said.

“China wants good quality wine and Australia produces it.”

Industry trade fell exponentially after China imposed a 220 per cent tax on Australian wine exports.

Beijing imposed trade sanctions worth $20 billion on Australian goods during the height of diplomatic tensions in 2020.

Impediments remain for Australian lobster and beef.

Trade Minister Don Farrell met China’s man in Australia, Xiao Qian, on Wednesday.

Chinese Foreign Minister Wang Yi visited Australia and met Foreign Minister Penny Wong earlier this month, while the Chinese Prime Minister is expected to travel to Australia later this year.

Australia lost its case in a World Trade Organization dispute with China over additional taxes on steel products.

China complained to the international body in June 2021 about Australian tariffs on railway wheels, wind towers and stainless steel sinks.

Australia had acted inconsistently with parts of an anti-dumping agreement, the WTO found in all three cases.

Australia had also launched two disputes against China over tariffs on barley and wine.

The government suspended both measures to allow Beijing to review the measures.

Trade impediments on barley have finally been removed and movement is expected imminently on wine.