Q1. On 26 March 2021, China decided to impose a tariff ranging from 116.2% to 218.4% on wine imported from Australia. These duties were applied to wine in containers of 2 litres or less excluding sparkling wine. This decision followed earlier restrictions that were imposed on Australian wines in the last quarter of 2020.

1. Using the aggregate demand and aggregate supply model, analyse the consequence of the impact of these tariffs on the Australian economy
2. Analyse wine export value and volume data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) commodities and trade data. Based on the export value and value for wine for years 2018 to 2020, is there any evidence of a negative impact on the Australian economy from the tariffs imposed by China on Australian wine?

Useful link: ABARES Agricultural Outlook -

https://www.awe.gov.au/abares/research-topics/agricultural-outlook/data#2021