Trade and welfare effects of food trade policy changes: Evidence from China's anti-dumping and countervailing measures on Australian barley

Abstract

Food imports play an important role in ensuring overall food security. This paper provides a dynamic assessment of the trade and welfare effects of China's anti-dumping and countervailing (“double reverse”) tariffs on Australian barley. Using a difference-in-differences approach and a partial equilibrium model, we find that trade destruction effects—marked by a significant drop in Australian barley exports to China—greatly outweigh trade diversion effects, with distinct outcomes across the investigation, execution, and termination phases. Although these measures offer short-term protection for Chinese barley producers, they result in a net welfare loss for China due to reduced consumer welfare. Australia also incurs a net welfare loss from decreased producer surplus and lower domestic prices. In contrast, third countries benefit from expanded access to China's barley market and a redirection of Australian barley exports.