China’s punitive tariffs on Australian wines could be lifted in an unofficial manner as tensions between the two countries thaw following signs of warming ties, according toa Bloomberg report.

This came after Australia’s Foreign Minister Penny Wong visited China for the first time last month to celebrate the two countries’ 50th anniversary of diplomatic relations and China shortly signalled that it would allow Chinese companies to resume coal imports from Australia, which was previously banned.

Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney, told Bloomberg that China’s restrictions on Australian goods including lobster, wine and other commodities could be gradually eased and resumed in an unofficial manner.

“Nobody could tell you whether it will start with barley, wine producers or lobsters for Chinese New Year,” Hendrischke said. However, there’s no confirmation from the Chinese side nor any indication of timing for the supposedly easing.

Australian wine exports to China plunged after punitive tariffs (pic: China Daily)

In the two years since China slapped up to 218% tariffs on Australian wines, its AU$1.2 billion annual exports plunged to just over AU$200 million. As a result, the hefty tariffs which is expected to last until 2026 contracted China’s wine imports and created a surplus of Australian wines.

As Australia’s 2023 vintage comes up, winegrowers complain that many grapes will be left to dry on the vines.

Wine Australia director and managing director of Taylors Wines Mitchell Taylorsaid, “We’ve got great oversupply hitting the industry because it takes a lot of time to plan these markets and then to make the wines, particularly red wines, which the Chinese love.”

Even though Australia started diversifying its markets after the tariffs, making up the losses from its former biggest export market has been slow.

Lee McLean, chief of industry association Australian Grape & Wine, cautions the elation with possible reopening of Chinese market and stresses the importance of market alternatives.

“Market diversification needs to continue,” said McLean. “We don’t want to get into a situation where we are too reliant on one market.”