As Relations Thaw, China Lifts Tariffs on Australian Wine

In a sign of easing tensions between Australia and China, China said Thursday it will lift the tariffs placed on Australian wine exports three years ago.

The tariffs, which were first imposed in 2020 amid a nasty diplomatic spat between Australia and China, had all but vaporized the country’s biggest overseas market, worth 1.2 billion Australian dollars or around $800 million at its peak. Australian winemakers faced desperate hardship and were stuck with a surfeit of big-bodied red wines.

The decision to lift the tariffs was announced by China’s Ministry of Commerce.

As of last August, Australia had the equivalent of 859 Olympic swimming pools of wine in storage, according to a report from Rabo Bank. “That’s going to take some time to be depleted,” said Lee McLean, the chief executive of Australian Grape & Wine Inc. “And China is not going to solve that on its own.”

The price of red grapes has barely covered their production costs, prompting some growers to simply let them wither on the vine, while others accepted contracts well below the cost of production, Mr. McLean said.

The development comes after months of moves toward rapprochement between the two nations, starting with a change in the Australian government. That has led to meetings between foreign ministers, the release in October of a detained Australian journalist and, in November, the first visit by an Australian premier to Beijing since 2016.

Beijing in October agreed to review the tariffs, which exceeded 200 percent. In an interim decision this month, the Chinese Ministry of Commerce indicated that the tariffs were no longer necessary.