Strained relations have already seen Beijing halt or impose curbs on other imports including beef, barley, sugar and timber.
Beijing argued the punitive anti-dumping duties were being levied in response to complaints that domestic wine producers were being damaged by low-priced Australian imports.
But the Australian government has denied subsidising wine exports and branded the move “outrageous”.
Trade minister Simon Birmingham said the tariffs would make Australian wine uncompetitive in China, which buys about 40% of his country’s production.
China – Australia’s biggest export market – halted or imposed curbs on imports of Australian beef, barley, seafood, sugar and timber after its government supported calls for an investigation into the origin of the COVID-19 pandemic, which began in China in December.
The ruling Communist Party is trying to deflect criticism of its handling of the outbreak by arguing the coronavirus started abroad, despite little evidence to support such claims.
Beijing is also frustrated that Australia is imposing measures to block Chinese influence in its political system and has banned Chinese telecom equipment giant Huawei from taking part in a planned next-generation phone network.
Meanwhile, Australia has joined Japan and Southeast Asian governments in expressing concern about Beijing’s construction of military outposts in disputed parts of the South China Sea, one of the world’s busiest trade routes.
The Chinese foreign ministry called on Australia last week to take action to improve relations.
Mr Birmingham said the sanctions against Australian imports suggested they were due to “other factors”.
He said the government had learned about the imposition of duties against Australian wine on a notice posted on the Chinese Ministry of Commerce website.
He said: “This is a very distressing time for many hundreds of Australian wine producers, who have built in good faith a sound market in China.”
He added: “Australia defends to the hilt our winemakers, their integrity, and the commercial market-based proposition and environment in which they operate.
“The idea that Australia somehow subsidizes our wine industry for it to be able to dump or sell its product below cost on international markets is a falsehood.
“Australia will stand by our wine industry, in defending their integrity, and in responding and appealing at every appropriate juncture to these findings.
“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 that these actions are being undertaken as a result or in response to some other factors.”
Minister of agriculture David Littleproud has condemned the move as “quite outrageous, and to be honest, disproportionate”.