Australia,apart from its proximity,has become one of China’s major trading partners because it is reliable,its products are high-quality and its prices are competitive.

Take coking coal. Australia – mainly BHP – supplies roughly half the metallurgical coal China’s steel mills import. While China has a massive domestic coal industry,its steel mills need the premium coal Australia produces.

Higher quality raw materials make the mills more productive,lower energy costs,produce less environmentally-damaging emissions and help contribute to higher quality end-products.

Since China first canvassed the ban on Australian coal,about 7 million tonnes – an estimated $US700 million ($950 million) worth of coal - has been left stranded,awaiting unloading,in Chinese ports. The ex-Australia coking coal price has slumped to about $US100 a tonne,its lowest levels for four years and nearly 30 per cent lower than the price two months ago.

That would suggest the “ban” – China says the curbs on imports of Australian coal are because many Australian producers have failed to meet environmental standards – is working to hurt Australia.

Chinese domestic coal prices,however,have risen sharply – they’re now about twice the price of imported coal – and the prices of the US and Canadian coking coal that is being substituted for the Australian product have also spiked.

So,Chinese steel mills are paying a lot more for lesser quality coals that reduce the productivity of their operations,produce more environmentally harmful emissions and lead to lesser quality products.

The market for coking coal is far more diversified than for,say,iron ore where China takes up to 80 per cent of Australia’s production. Japan,South Korea,India and even Europe are existing customers. India,in particular,is experiencing something of a steelmaking boom and has been buying more Australian coal.

Thus,to punish Australia China is damaging its own steel's competitiveness by providing its competitors with access to more high quality but lower-priced raw materials that self-evidently meet the Japanese,Korean and Indian environmental standards.

The massive tariffs on Australian wine for supposed dumping – selling products below the cost of producing them – is as absurd,although the cost of that action will be borne via reduced choice for Chinese consumers.

Australia is the biggest exporter of wine to China and Treasury Wine Estates is the heavyweight among those exporters. The 169.3 per cent tariff on its wines will effectively price them out of the market.

Maybe the targeting of Australian wine and coal is as much a protection racket as it is punishment for Australian politicians offending Chinese sensitivities.

If Treasury is dumping wine in China,however,it’s not at all obvious in its financials. The Treasury EBITS (earnings before interest,tax and the accounting treatment for its wine inventories) margin in Asia,where China generates more than two-thirds of the division’s earnings,is a touch under 40 per cent.

That compares with a margin of 22.5 per cent in Australia,13.8 per cent in the US and 14 per cent in Europe,the Middle East and Africa and looks more like profiteering than dumping.

China is trying to revive its domestic wine industry,where production has more than halved in the past three years. There’s also been a spate of defaults on corporate bond issues by Chinese state-owned coal producers.

Maybe the targeting of Australian wine and coal is as much a protection racket as it is punishment for Australian politicians offending Chinese sensitivities. In any event,while it will harm Australian producers,there’ll be some self-inflicted harm,too. Just like Trump’s tariffs.