In some of the darkest days in the political relationship between Australia and China, trade became a tool to inflict pain.

The early 2020s trade war saw China slap higher tariffs on Australian wine and barley, impose biosecurity measures against beef and timber, and ban lobsters and even some coal.

It took four long years for the trade relationship to be resolved, and even longer for the political friendship to be rekindled.

But the devastating consequences from that time still cast a long shadow of lingering fear within trade circles.

So, it's no wonder panic is rippling across the industry since Beijing slapped huge new tariffs on Aussie beef this week.

Australian beef, seen on shelves in the US, was exported at record levels this year. (Supplied: Dalene Wray)

Fears of larger trade crackdown

Questions were immediately raised about whether this was a result of political breakdown between the two countries, despite the relationship appearing healthy and thriving.

And the bigger fear is whether this could be the start of a larger trade crackdown by Beijing.

The answer, as with most issues in China, is rarely simple.

China's Ministry of Finance and Commerce announced that from the start of 2026, several countries, including Australia, would be impacted by new beef import tariffs.

The trade measures included a new 55 per cent fee on beef imports that exceeded an annual quota. A quota that has been exceeded by a large margin in the past.

China's commerce ministry on Wednesday explained the tariffs, also impacting Brazil and the United States, were designed to protect the burgeoning domestic cattle industry from oversupply.

In other words — China wants more of its people to eat its own beef, and not the prized stuff from overseas.

Australian industry 'disappointed'

The announcement sent a wave of anger through Australia's beef industry, which said it was "extremely disappointed", and suggested Australian leaders needed to go in to fight against Beijing.

But if you've looked at China's domestic economy recently, the move shouldn't come as much of a surprise. It's in deep trouble, plagued by a real-estate crisis, local government debt, and a slowdown in manufacturing and infrastructure investment.

China's consumers are also saving more and spending less.

To combat its sluggish financial sector, Beijing has been focusing on stimulating local industries — including beef — to boost local capacity and demand.

But as local production has climbed, so too has the importation of more treasured foreign beef, resulting in an oversupply and driving down local prices.