Amid rising expectations of China’s retaliation to Australian push for the coronavirus (COVID-19) outbreak, China’s Global Times (GT) came out with the news during late-Sunday, based on Chinese experts, suggesting further hardships for the pacific nation.
Key quotes
Australia worries that China will impose tariffs on its exported barley, but it might face much bigger problems than barley if it continues to take unfriendly action against China, experts warned on Sunday.
The comments came after Reuters reported that China might increase duties on Australian barley, as bilateral ties between the world’s second-biggest economy and one of its biggest suppliers of farm products have been further damaged by Canberra’s most recent move on the origins of COVID-19.
Relations are the foundation of trade between two countries, and deteriorating ties could result in severe damage to bilateral trade between China and Australia, Jiang Yong, an expert at the China Institutes of Contemporary International Relations in Beijing, told the Global Times on Sunday.
On November 19, 2019, China extended for six months an anti-dumping investigation on Australia’s exported barley that started on November 19, 2018, and the investigation is due to finish on May 19 this year. This apparently caused Australia’s anxiety on potential tariffs.
FX implications
Considering Australia’s reliance on China, the news should weigh on the Australian Dollar (AUD) while also negatively affecting the market’s risk-tone sentiment. As a result, the AUD/USD pair stays pressured around 0.6530 by the press time.
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