Australian Prime Minister Scott Morrison said on Monday he expects Beijing to keep its judgment on whether Australia dumped barley into China separate from protests over Canberra's call for an inquiry into the origins of the novel coronavirus.
Several major Australian grain groups on Sunday said they have been told China is proposing tariffs on barley from Australia after an 18-month inquiry into whether they have been dumping the grain into the Asian nation.
China's Ministry of Commerce (MOFCOM) is considering imposing a dumping margin of up to 73.6% and a subsidy margin of up to 6.9% for barley imported from Australia, according to industry group Grain Producers Australia.
The regulatory proposal on the tariffs comes about two weeks after China's ambassador to Australia said there may be economic consequences for Canberra's push to initiate an inquiry into the origins of the coronavirus that causes Covid-19.
Morrison, however, said he expected Beijing to make its final judgement on barley-dumping free from politics.
"We would expect and hope that this issue will be determined on its merits (whether) it's an anti-dumping issue from the Chinese perspective," Morrison told reporters in Canberra.
"They certainly haven't raised it as connected to any other issues, and I'd be extremely disappointed if it was."
Australia's conservative government and the nation's grain exporters have denied they are dumping barley.
Australia has eight days to respond to MOFCOM's tariff proposal before the ministry rules on them on May 19, said a source familiar with the matter on Monday.
If China imposes a tariff on barley, it would severely hurt Australian grain growers, who have already sown their crops.
"An 80% tariff would effectively stop the trade. Australian growers would have to find an alternative market in a world that is pretty well supplied," said Phin Ziebell, agribusiness economist, National Australia Bank.
Australia is China's top supplier of barley, sending it about A$1.5 billion to A$2 billion ($980 million to $1.3 billion) of the grain each year. China takes more than half of Australia's barley exports.
If Australian barley stopped flowing to China, it would open the door for U.S. exporters.
China in January pledged to increase purchases of goods and services from the United States by $200 billion - including large amounts of agricultural products - over two years compared to a 2017 baseline.