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Iron Ore Rockets To $160 A Ton And China Cries Foul

Like all trade wars the David v Goliath fight between China and Australia is morphing into a lose/lose game of point scoring with China trying to humiliate its smaller target only to see Australia skip away unscathed, so far.

What started with China banning the import of Australia barley and other farm products has been ratcheted up with the imposition of punitive tariffs on wine and a formal ban on Australian thermal, or electricity-producing, coal.

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The net result of China’s tariff attack and import bans has been totally negated by a sharp rise in the price of Australian iron ore, causing the Chinese Iron and Steel Association (CISA) to cry foul and call for government intervention.

The problem for CISA is

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China tariffs offset by rising Australian iron ore prices due to ‘fear tax’

Australia’s losses from trade tensions with China are being offset by rising iron ore prices, according to new analysis, which also predicts the Morrison government will announce a smaller budget deficit than originally forecast.

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Deloitte Access Economics said Chinese government moves against wine, beef, barley, lobsters and thermal coal have cost Australia money “but we’ve more than made that up in overall terms thanks to iron ore – and the taxman will be a considerable beneficiary of that”.

Chris Richardson, a Deloitte partner and leading economist, said spot prices had risen by US$18 a tonne since 30 November amid fears that China may consider taking some action against Australian iron ore, resulting in markets “nervously bidding up prices”.

Related: A comfortable fit: Nationals push for trade portfolio in looming Morrison cabinet reshuffle

“This ‘fear tax’ isn’t the only thing driving up prices – markets are also worried that

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