While speaking to reporters in Canberra on Monday, Australian Prime Minister (PM) Scott Morrison said that he hopes China doesn’t mix up its decision on the coronavirus investigation and barley trade issues.

This comes after industry group Grain Producers Australia reported that China’s Ministry of Commerce 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.

China’s retaliation is in lieu of Canberra’s push for an inquiry into the origins of the coronavirus outbreak.

Earlier today, Global Times quoted Chinese exports, saying that “Australia worries that China will impose tariffs on its exported barley, but it might face much bigger problems than barley if it continues to take unfriendly action against China.”  

Market reaction

The trade tussle between the two economies is likely to overshadow the optimism on the global economic re-openings, which could weigh down on the risk appetite across the board.

The aussie dollar is seeing some fresh selling pressure, as AUD/USD retreat from weekly tops of 0.6562 to now trade at 0.6542. The spot still adds 0.25% on the day.