Australia is preparing to take action against China at the World Trade Organisation (WTO), over tariffs on barley imports, the latest salvo in a trade dispute that has disrupted the supply of commodities from coal to wine.

China in May placed tariffs of 80.5% on Australian barley, commonly used for beer brewing, saying it was being sold at unfairly low prices with the help of subsidies. Australia rejected that finding and directly appealed to Chinese authorities to reverse the duties, but was rebuffed.

“So now the WTO appeal for barley is the next step,” Australian Trade Minister Simon Birmingham said.

The government is however, holding talks with the local grains industry and other sectors to gauge support for filing a complaint, Birmingham added.

Australia incurred China’s anger in April when it sought support from European leaders to investigate whether Beijing’s early response to the coronavirus contributed to the pandemic.

Many Australian lawmakers and economists see the tariffs as retaliation by China for that diplomatic push.

Days before the barley tariffs were imposed in May, China said it had suspended beef imports from four Australian exporters, citing inspection and quarantine violations.

Trade frictions have since broadened to a range of other Australian products as China further imposed anti-dumping tariffs on imports of Australian wine following a Ministry of Commerce investigation that began in August.

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