Prime Minister Scott Morrison says China is putting up the price of Australian wine in "retaliation" for Australia standing up for its values and that's "not OK".
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China's Ministry of Commerce announced the new measures would kick in from Sunday and last five years, in a statement released on Friday.
Some importers will need to pay tax to China's custom authority, in a move China says is an anti-dumping measure.
Mr Morrison said Australia "completely rejects" 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."
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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.
Minister for Trade, Tourism and Investment Dan Tehan earlier called the decision "extremely disappointing and completely unjustifiable", pledging to do everything he could to reverse it.
Tariffs of between 116 and 218 per cent mean it will be "basically impossible" for Australian wine to compete in the Chinese market, Mr Tehan 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 November 28 for four months, but warned it could extend them.
Australian Associated Press
