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China and Australia commodities trade tensions

BEIJING (Reuters) - Australia’s ties with top trade partner China soured in 2018 when it became the first country to publicly ban China’s Huawei [HWT.UL] from its 5G network, and worsened after Canberra called for an enquiry into the origins of the coronavirus.

FILE PHOTO: Coal is unloaded onto large piles at the Ulan Coal mines near the central New South Wales rural town of Mudgee in Australia, March 8, 2018. Picture taken March 8, 2018. REUTERS/David Gray

Tit-for-tat diplomatic reprisals have since followed, including raids on the homes of Chinese journalists in Australia, evacuation of some Australian journalists from China and a raft of trade measures imposed by China on Australian exports.

China is by far Australia’s top overall export market, worth $104 billion in 2019 according to the IMF, so a lasting severing of trade ties could damage the Australian economy.

Australian shipments of beef, barley and coal worth billions of dollars have been the most impacted by recent measures, and China has been able to find alternative supplies easily.

Graphic - Australian commodity exports to China:

Iron ore - Australia’s top export and a critical ingredient for China’s massive steel sector - has been spared so far from any crossfire, as has Australian LNG.

Here is a timeline of how commodities markets have been impacted by the mounting tensions between the countries:

FEBRUARY 2019

China's northern port of Dalian bans imports of Australian coal and caps overall coal imports from all sources to the end of 2019 at 12 million tonnes. [here]

MAY 2020

China hits Australian barley with anti-dumping and anti-subsidy duties totalling 80.5% from May 19, with the duties expected to last five years.

It also halts beef imports from four of Australia’s largest meat processors.

AUGUST 2020

China, the top export market for Australian wine, launches anti-dumping and anti-subsidy probes on some Australian wines.

AUGUST 31/SEPTEMBER 2020

China suspends barley imports from Australia’s largest grain exporter CBH Grain after pests were found, and orders stricter inspections of Australian wheat and barley.

Australia is the biggest barley supplier to China, exporting about A$1.5 billion to A$2 billion worth a year, which is more than half its exports.

OCTOBER 2020

Australia investigates reports that China has verbally instructed buyers to avoid Australian supplies.

Reporting by Shivani Singh; editing by Jason Neely

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