ppendlx 1 – The Article (Extract only) China has 5 appe an 80 per cen on all barley grain imported from Australia.One thing is clear: Austral’ as ﬁnally been engulfed by the global trade wars stirred up by US President Donald Trump, and Australian farmers are ﬁrmly in the ﬁring line.China is the world‘s biggest drinker of beer, a key ingredient of which is barley.And how do tariffs work? What’s a tariff? Essentially a tax imposed by a government on goods or services imported from othercountries. They are there to protect domestic suppliers — and jobs — from competition. Tariffs were cut back dramatically during the reform era of the 19705 and 1980s. Economists don‘tlike tariffs because they artificially allow less productive firms to survive, when those resources — ofpeople and capital — would be better deployed doing other more productive things, which wouldproduce higher investment returns and wages. Tariffs also mean consumers pay higher prices on imported goods because the businesses thatimport the goods have to fork out for the tariff and tend to pass on the cost to consumers. Another effect of tariffs is that consumers end up with less diversity in the products available tothem because foreign producers don‘t bother trying to market their goods in a country if they know their goods won‘t be priced competitively. Instead, consumers tend to get whatever domesticproducers make. Much effort has been expended internationally through multilateral and, more recently, bilateralfree-trade agreements to try to get rid of such taxes on trade. China is Australia’s biggest trading partner. We sent 563 billion worth of iron ore to China in 2018-19, $17 billion of natural gas and $14 billion of coal. What happens after the ta riff is imposed? China‘s decision is effective immediately. Some grain already on ships may be exempt. But it isunlikely Chinese importers will choose to buy much more Australian barley now that the price haseffectively doubled. They will import from other countries. Australia‘s barley exporters will try to sell their grain to other countries, mostly other south-eastAsian nations, but they are likely to be forced to accept a lower price, given they suddenly havefewer potential buyers. Ultimately, farmers who survive will be forced to sow other crops to sustain a living. It’s true that Australia imposes its own “countervailing duties” on a wide range of imports, from Thaipineapples to Italian tinned tomatoes, in a bid to support our homegrown versions. Industriesseeking protection from import competition apply to the Anti-Dum ping Commission, which decideswhat level of duty to impose. Kirchner says there has been bipartisan support from both sides of politics in recent years forramping up such “anti-dumping” duties. One thing is clear: the global trade wars that erupted with Trump’s presidency and engulfed theworld last year have finally arrived on Australia‘s doorstep. At a time of heightened economicuncertainty, policy makers will need to tread carefully.