Australian wine going into the Chinese market will face tariffs of up to 212 per cent, having previously benefited from zero tariffs under the China-Australia free-trade agreement.
Relations between Australia and China have soured in recently, with China's grievance list spanning foreign investment rules, banning Huawei from the 5G network and the push for an inquiry into the origins of coronavirus.
China has launched a series of trade strikes against Australia encompassing barley, cotton, red meat, seafood, sugar, timber and coal exports, as the diplomatic row deepens.
“The cumulative impact of China's trade sanctions against a number of Australian industries during the course of this year does give rise to the perception these actions are being undertaken as a result or in response to some other factors,” Senator Birmingham said.
“(It) is completely incompatible with the commitments that China has given through the China-Australia free-trade agreement and through the WTO.”
Australian officials will seek to overturn the move over the next 10 days, after which the dispute could be taken to the World Trade Organisation.
Chinese officials said an investigation had found "substantive" evidence of the dumping of Australian wine and "material damage" to the Chinese wine market.
The tariffs cover a range between 107.1 per cent and 212.1 per cent.
The rate required of Australia's Treasury Wine is 169.3 per cent, which saw its shares fall more than 13 per cent before being put on a trading halt pending an announcement.
China began an anti-dumping probe into imports of Australian wine in August at the request of the Chinese Alcoholic Drinks Association.
Senator Birmingham said the investigation's finding was "erroneous in fact and in substance" and Australia would provide Chinese authorities with detailed evidence of how the wine industry works.
Australian wine exports to China were worth $1.1 billion in the year to June 30.
Federal Agriculture Minister David Littleproud said the government was extremely disappointed in the move by Australia's top wine market.
“The fact is Australia produces amongst the least subsidised product in the world and provides the second-lowest level of farm subsidies in the OECD,” Mr Littleproud said.
“The Australian Government categorically rejects any allegation that our wine producers are dumping product into China, and we continue to believe there is no basis or any evidence for these claims.”
Labor's trade spokesperson Madeleine King said exporters were looking for leadership from the government, but seeing no plan for restoring relations with China.
“The relationship with China is increasingly complex,” Ms King said.
“It is a relationship that must be managed in the national interest and not for partisan political interests.”
She said billions of dollars in trade and thousands of Australian jobs were at risk.
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