China will impose taxes on Australian wine of up to 212%, starting on Saturday.
Its commerce ministry said these were temporary anti-dumping measures to stop subsidized imports of Australian wine.
The duties will range from 107% to 212%, intensifying trade tensions between the two countries.
In recent months, Beijing has targeted Australian imports including coal, sugar, barley and lobsters amid political tensions.
Officials in China have argued that some Australian wine is being sold cheaper there (dumped) than in its home market through the use of subsidies. Australia has rejected that assertion.
China is the biggest destination for Australia’s wine exports, accounting for 39% in the first nine months of 2020, according to Wine Australia.
China has been carrying out a year-long investigation into anti-dumping, looking at wines being sold in China at prices alleged to be lower than in Australia.
Following the announcement on Friday, Treasury Wine Estates (TWE), one of the world’s biggest winemakers saw its share price slump more than 13%.