Sydney (AFP)

Australia, "disappointed" with China's decision to levy punitive tariffs on its barley, said Tuesday it plans to take the dispute to the World Trade Organization amid political tensions between the two countries.

The Australian administration has, however, minimized the risk of a trade war, Canberra saying it does not want to respond with a "loaned-for-return" response with China, its main trading partner.

Beijing on Monday announced 80.5% tariffs on Australian barley after finding that Australian subsidies and dumping have "dealt a major blow to the domestic sector".

"To say that I am disappointed is an understatement," said Agriculture Minister David Littleproud on Tuesday. "We categorically reject the premise that barley grown in Australia is subsidized in any way."

"We will now work with the Chinese authorities, calmly and methodically, and we reserve the right to go to the World Trade Organization to have an independent arbitrator decide this issue," said Littleproud.

China buys more than 50% of Australian barley exports: 2.5 million tonnes last year, far ahead of Japan (800,000 tonnes).

An anti-dumping tax of 73.6% and an anti-subsidy duty of 6.9% will come into effect on Tuesday for a period of five years, said the Chinese Ministry of Commerce.

The move comes after Beijing's decision to suspend imports of Australian beef from four major suppliers amid tensions with Canberra, which is calling for an investigation into how Beijing handled the new coronavirus crisis.

Littleproud, however, denied any connection between these tensions and the new tariffs, saying that this is "not a trade war". "We continue to trade openly with a number of other commodities, not only in agriculture, but also in minerals and services. This will not change," he said.

Beijing says it took the measure following a government investigation into grain imports from Australia.

Australian Trade Minister Simon Birmingham has said there will be no retaliation. "We do not conduct trade policies on the basis of the principle" loaned for rendering ". We will continue to operate as we have always done," he added.

© 2020 AFP