Australia's trade minister threatened to take China to the World Trade Organisation on Saturday over its "unjustifiable" decision to hike duties on Australian wine imports for up to five years.
In the latest salvo between Beijing and Canberra, China's commerce ministry announced levies ranging from 116.2 percent to 218.4 percent would be slapped on Australian wine imports from Sunday.
Some importers will need to pay tax to China's custom authority, in a move China says is an anti-dumping measure.
Trade Minister Dan Tehan said the tariffs meant it was "basically impossible" for Australian wine to be competitive in the Chinese market.
"This decision which has been taken by the Chinese government is extremely disappointing and completely unjustifiable," Mr Tehan told reporters in Melbourne on Saturday.
"We will be looking at next steps, and those next steps will include looking at taking this matter to the World Trade Organisation."
Prime Minister Scott Morrison said Australia "completely reject(s)" what he called "non-tariff restrictions".
"By their own admission, publicly, [this is] some form of retaliation for Australians standing up for our values," he told reporters. "That is not OK."
The prime minister said Australia stood alongside the UK in condemning the treatment of Uighurs in Xinjiang, and that Australia's ally had also come under sanctions for their position.
"I stand with Prime Minister Johnson... Boris, well done mate, we stand with you and thanks for standing with Australia as well," he said.
Beijing has launched trade strikes against a range of Australian products including coal, barley, beef, lobster and timber.
Mr Tehan said such decisions "make it hard" to continue to work with the Chinese government to develop the economic relationship between the two countries.
He said he'd spoken with the Australian wine industry and was looking at taking the issue to the World Trade Organisation.
The industry and government would work closely together to explore other markets, he said.
"Chinese consumers have shown quite clearly a great liking for Australian wine, and we're very confident that consumers right around the world will also want to appreciate the great product that Australian winemakers and Australian grape growers produce," he said.
The decision comes after China last year said it would impose temporary tariffs on wine from Australia from 28 November for four months, but warned it could extend them.