Fears of a global trade war have escalated after China imposed retaliatory import tariffs on Australia for demanding an inquiry into its handling of the coronavirus.
Australia, with the backing of 100 other countries including the UK, has demanded the probe into the origins of the virus and how China initially handled its spread.
China – the largest export market for Australian producers of the wheat – has since imposed 80% tariffs on Australian imports of barley.
Chinese president Xi Jinping voiced support for a WHO-led investigation, the Guardian reported, though the US has accused the WHO of pro-China bias.
New cold war
The tariffs come amid reports of a new ‘cold war’ emerging between the US and China.
Tit-for-tat import tariffs and trade restrictions have been commonplace since President Trump came into office in 2016, and the White House continues to blame China for the spread of the coronavirus.
The US recently imposed tougher export controls to restrict the sale of semiconductors to Chinese tech giant Huawei, which it believes is helping the Chinese government conduct cyber-espionage and technology theft, according to the FT.
UK in the crossfire
Australia is not the only country likely to be caught up in escalating trade and geopolitical tensions.
Last week the Guardian reported the US is looking to insert a clause into its potential trade deal with the UK which “would allow it to retreat from parts of the deal if Britain reaches a trade agreement with another country that the US did not approve.”
The US has previously put public pressure on the UK not to reach an agreement with Huawei to provide its 5G telecoms network.
Conservative think-tank, the Henry Jackson Society, has also said the UK is too reliant on China for imports of 71 critical goods, including active pharmaceutical ingredients needed to make painkillers, antibiotics and anti-viral drugs, report the Times.
In April, foreign secretary Dominic Raab said there could not be a return to “business as usual” between the UK and China after the pandemic.
It is also believed that the UK would look to use its Commonwealth connections to negotiate a trade deal with Australia in the future.
The UK has already set out its objectives for trade negotiations with Japan in which it said a UK-Japan deal would be the first step towards potentially joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
CPTPP is a trade agreement signed by 13 nations including both Japan and Australia, as well as Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The UK is also in negotiations for a trade deal with the EU. The USA last year imposed 25% import tariffs on EU (including UK) goods such as cheese, pork and whisky in retaliation at EU subsidies for aircraft manufacturer Airbus.