How Australia and China's trade relationship broke down

On May 6, the Chinese government announced it would no longer engage in economic dialogue with Australia. That came after the Australian government canceled two deals under the China's multibillion-dollar Belt and Road Initiative.

The relationship between the two countries has been fraying since 2015, when Australia became the first country to publicly block Huawei from participating in its 5G network. It was concerned the tech giant would divulge data to the Chinese government. Huawei has repeatedly denied those claims. 

The dispute escalated in 2020, when Australia joined 14 other countries to demand further investigation into the origins of the coronavirus. China responded by placing tariffs and restrictions on Australia's major exports including seafood, beef, wine, coal and barley. These targeted exports were worth $25 billion in 2019, or 1.3% of Australia's GDP. A year later, China refused to engage in economic dialogue with Australia.

Australia has been trying in vain to revive the dissolved communication lines ever since, and is counting on the World Trade Organization to settle the five-year dispute.

Watch the video to learn more about how these two countries created a trading relationship and the reasons it's dissolving.