China steps up trade war with Australia by slapping a ban on the nation's ...

The trade war between China and Australia has escalated after the communist nation slapped a ban on our biggest grain exporter after disputed claims pests were found in multiple shipments.

The move comes a day after the Australian Government confirmed TV anchor Cheng Lei was arrested in China on August 14, and has been in custody since. 

West Australian grain handler CBH vowed to fight the 'extremely disappointing' decision, which appears to be the latest trade strike fuelled by diplomatic tensions.

Finance Minister Mathias Cormann said the federal government wanted to get to the bottom of the situation.

'We do respect the fact that China - like any other country would, like we would - has got quarantine inspection arrangements,' he told reporters in Canberra on Wednesday.

China has escalated its trade war with Australia by banning a top grain exporter from sending barley to the nation after disputed claims pests were found in multiple shipments

China has escalated its trade war with Australia by banning a top grain exporter from sending barley to the nation after disputed claims pests were found in multiple shipments

China's customs department confirmed the decision on Tuesday, saying quarantine pests were found in CBH barley exports multiple times. Pictured: Chinese President Xi Jinping

China's customs department confirmed the decision on Tuesday, saying quarantine pests were found in CBH barley exports multiple times. Pictured: Chinese President Xi Jinping

'We will be working with the company once we are aware of all the facts to make the appropriate representations.'

China's customs department confirmed the decision on Tuesday, saying quarantine pests were found in CBH barley exports multiple times.

But the grain cooperative insists there is no evidence to support the claim.

'CBH is therefore extremely disappointed the suspension has been put in place and will continue to work with the Australian government to challenge the suspension,' the exporter said.

Australian farmers were already effectively blocked from exporting barley to China, which imposed tariffs of 80.5 per cent on the commodity in June.

Senator Cormann said CBH had a great track record, but declined to speculate if diplomatic issues had sparked the ban.

'The truth is, Australia's grain products, Australia's barley products, are highly regarded all around the world,' he said.

'If there is less opportunity to

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