China's commerce ministry said Thursday it was lifting punitive tariffs on Australian wine, as trade ties improve between the two countries after years of tension.

China's commerce ministry on Thursday said that “in view of the changes in the wine market conditions in China,” it was “no longer necessary to impose anti-dumping duties and countervailing duties on imported wines originating from Australia.”

The measure would come into effect on Friday, two days before the end of a five-month review period agreed on by Canberra and Beijing that saw Australia suspend a dispute on the issue at the World Trade Organization for that period.

The decision scraps duties as high as 218% on Australian wine exports to China, its largest overseas market once worth more than 1 billion Australian dollars ($653 million).

The Australian government said it welcomed Beijing’s decision “which comes at a critical time for the Australian wine industry.”

“Since 2020, China’s duties on Australian wine effectively made it unviable for Australian producers to export bottled wine to that market,” the statement read.   “We acknowledge and thank Australian grape growers and wine producers for their fortitude and support during a challenging period.”

The wine tariffs were part of a raft of trade curbs Beijing slapped on key Australian exports starting in 2020.

Their removal comes amid a thaw in China-Australia relations that’s seen Chinese authorities steadily roll back a number of those barriers including on barley, timber, and coal.

“The Australian Government’s approach is to cooperate with China where we can, disagree where we must and engage in our national interest,” the Australian government said it its Thursday statement.

Beijing’s move will be embraced by the country’s hard-hit winemakers, who have been grappling with oversupply amid flagging broader global demand on top of years of major revenue losses from China.

The removal of the wine tariffs was widely expected after Beijing earlier this month notified the Australian government of an interim decision to remove the duties.

Tariffs of up to 212% were originally introduced by China’s Ministry of Commerce in November 2020.   A final ruling the following March set between 116% to 218% antidumping and countervailing duties for a five-year period.

The wine duties were a sharp hit for the key Australian industry, with sales to China down 97% in 2021 from the previous year at a loss of nearly $1 billion in value and 90 million liters in volume, according to national industry group Wine Australia.

Global exports also dropped by 30% in value during that period.

Annual wine production hit its lowest point in more than 15 years during 2022-2023, Wine Australia said.   The same year, the United Kingdom and the US became the country’s most valuable export markets.