There is a covert diplomatic trade war between Australia and China, and it is showing the world how China responds when it takes offence or simply does not like your diplomatic stance.
First, responses from China are random and arbitrary – making it hard to respond.
Second, communication about trade bans is always informal and difficult to clarify.
Third, unexplained checks on products slow trade down or lead to damaged goods.
Examples of this use of checks to pursue trade reprisals include looking for weeds in barley, questionable metallic levels in lobsters, or bugs in timber. An aligned strategy includes the Chinese allegations of Australian producers dumping wine, tariff threats on cotton and talk of curbs on Australian copper and coal.
Iron ore – Australia’s major export – is so far not involved.
For Australia, exports to China dominate the economy. Consider these figures of “the top 5” where Australia exports:
China A$150 billion
Japan $52 billion
South Korea $25 Billion
USA $17 billion
UK $15 billion
The world is watching this trade dispute – and learning how China goes about it.