There are concerns that the trade dispute between Australia and China could spiral out of control - and have dire consequences for local industry.

Chinese media reports customs restrictions will be extended to Australian wine, lobster, timber, sugar, wool, wheat and copper-ore.

Beijing denies the embargo is for political reasons.

Richard McGregor from the Lowy Institute told Gareth Parker China is not only sending a message to Australia - but to its own importers.

Pastoralists and Graziers Association President Tony Seabrook said the damage to the Australian economy would be significant.

"This is not about to go away and the opinion seems to be it hasn't reached its peak yet," he said.

"Anyone can see they are punishing us.

"Someone said to me a while ago, the dragon has bared its teeth."

 

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