(Reuters) – China is resuming coal trade with Australia after a three-year hiatus, following strained relations between the two countries over broader issues.

What happened between China and Australia?

Relations between China and Australia have been strained since 2018 when Canberra banned Huawei Technologies from its 5G broadband network.

The relationship deteriorated further in 2020 after Canberra called for an international investigation into the origins of COVID-19, which led to a series of trade reprisals by Beijing on Australian exports.

What products are affected?

Apart from coal, exports of barley, beef, cotton, wine, lobsters and grapes were subject to varying restrictions during 2020.

However, China continued to purchase large quantities of iron ore, wheat and liquefied iron.

What did the rebellion involve?

China has given verbal instructions to buyers to avoid Australian commodities such as coal and cotton, and has imposed anti-dumping duties on barley and wine.

An order in October 2020 to avoid coal from Australia sent prices down and left dozens of ships stranded outside Chinese ports. Beijing later said it found coal imports failed to meet environmental standards.

What products were the hardest hit?

Anti-dumping and subsidy tariffs on both barley and wine, applied for five years, all but wiped out imports of the products.

The total tariff on barley was 80.5% while the tariff on wine was 218% for some brands.

Wine exports to China, formerly Australia’s largest market, fell by $844m in the year to March 2022, the first year after the final tariffs were imposed.

Barley trade with the world’s largest brewer was previously worth between A$1.5 billion ($1.01 billion) and A$2 billion a year.

What about other merchandise?

China also ordered cotton mills to stop buying Australian supplies or face a 40% tariff. China was the largest buyer of Australian cotton, accounting for about 60% of its supply, worth around A$900 million during the 2018-2019 crop season.

Five of Australia’s largest beef manufacturers have also been suspended from exporting to China in 2020 for reasons such as poor labeling and contamination with a banned substance.

Although other plants are still allowed to ship to China, importers have complained of long delays clearing Australian beef through customs. The trade value was A$3 billion in 2019.

Meanwhile, lobster exports plummeted after Chinese customs said they would be subject to enhanced inspections.

Has it affected the Australian economy?

Despite the measures, Australia continued to record a trade surplus with China thanks to higher commodity prices, particularly iron ore.

Australia has also succeeded in shifting exports of coal, barley and other products elsewhere.

Barley growers also reduced the acreage under grain and planted more canola instead.

Australia’s largest wine company, Treasury Wine Estates (OTC:), has shifted its strategy to produce wine in China to rebuild businesses decimated by tariffs.

Goldman Sachs (NYSE:) said in a Jan. 6 note that the overall economic impact of easing restrictions, while positive for affected sectors, is likely to be small.

Who benefited?

South African winemakers have seen a boom in demand, while barley exports from France, Canada, Argentina and Ukraine to China have soared.

Cattle farmers also benefited from the United States, as China sought an alternative supplier of high-quality grain-fed beef.

What prompted the resumption of coal purchases?

Relations between Beijing and Canberra have improved following a shake-up in the Australian government, highlighted by a meeting between the two countries’ foreign ministers in Beijing last month and letters between the two leaders.

Australia hopes China will also ease other import restrictions. Trade Minister Don Farrell said in late December that he was willing to visit China to talk about Beijing’s restrictions on barley and wine, currently the subject of an Australian complaint to the World Trade Organization.

($1 = 1.4797 Australian dollars)