In some of the darkest days in the political relationship between Australia and China, trade became a tool to inflict pain.

The early 2020s trade war saw China slap higher tariffs on Australian wine and barley, impose biosecurity measures against beef and timber, and ban lobsters and even some coal.

It took four long years for the trade relationship to be resolved, and even longer for the political friendship to be rekindled.

But the devastating consequences from that time still cast a long shadow of lingering fear within trade circles.

So, it’s no wonder panic is rippling across the industry since Beijing slapped huge new tariffs on Aussie beef this week.

Fears of larger trade crackdown

Questions were immediately raised about whether this was a result of political breakdown between the two countries, despite the relationship appearing healthy and thriving.

And the bigger fear is whether this could be the start of a larger trade crackdown by Beijing.

The answer, as with most issues in China, is rarely simple.

China’s Ministry of Finance and Commerce announced that from the start of 2026, several countries, including Australia, would be impacted by new beef import tariffs.

The trade measures included a new 55 per cent fee on beef imports that exceeded an annual quota. A quota that has been exceeded by a large margin in the past.

China’s commerce ministry on Wednesday explained the tariffs, also impacting Brazil and the United States, were designed to protect the burgeoning domestic cattle industry from oversupply.

In other words — China wants more of its people to eat its own beef, and not the prized stuff from overseas.

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Australian industry ‘disappointed’

The announcement sent a wave of anger through Australia’s beef industry, which said it was “extremely disappointed”, and suggested Australian leaders needed to go in to fight against Beijing.

But if you’ve looked at China’s domestic economy recently, the move shouldn’t come as much of a surprise. It’s in deep trouble, plagued by a real-estate crisis, local government debt, and a slowdown in manufacturing and infrastructure investment.

China’s consumers are also saving more and spending less.

To combat its sluggish financial sector, Beijing has been focusing on stimulating local industries — including beef — to boost local capacity and demand.

But as local production has climbed, so too has the importation of more treasured foreign beef, resulting in an oversupply and driving down local prices.

This week’s announcement is Beijing’s attempt to address that, by using trade policy to reach its very public goals of boosting domestic economic growth.

China is facing extra pressure right now to improve its local fortunes, as it stares down threats from major overseas partners, like the European Union, which is threatening its own tariffs after a surge in Chinese imports.

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A crucial domestic market

With China’s export market under threat, its domestic market becomes more important than ever.

Australia’s beef export industry says it is no threat to China’s local production, but China clearly disagrees.

In fact, in the last year, Australian imports of beef have surged into Beijing in levels not seen since before the COVID-19 pandemic, mostly filling the gap left by US beef after Donald Trump unleashed a tit-for-tat tariff war.

The new quota set by China for Australian beef in 2026 is almost exactly the same as the quota for 2025, which Australia exceeded by about 100,000 tonnes.

That is about a third of Australia’s beef export total to China in the last year.

But in several successive years before 2025, Australia’s beef export capacity was always well below threshold levels.

It’s likely Beijing’s new measures are aimed at trying to rein in an Australian surge and managing local growth, rather than a direct target on Australia.

Prime Minister Anthony Albanese doesn’t seem too concerned about the change and isn’t likely to take this as a political fracture in his relationship with China’s leader Xi Jinping.

And although there’s no overt political undertone to these new tariffs, there is still one important message: global trade is increasingly delicate, especially as Beijing sets its sights on becoming the largest and most powerful economy in the world.