Chinese media outlets, including The Global Times and Caixin, reported on Monday that China's chief economic planner has allowed power plants to import coal without customs restrictions from all over the world except Australia.
Australia on Tuesday urged China to clarify reports it says violate international trade rules, if true.
Coal is Australia's third-largest export commodity, where officials have criticized the country's main trading partner and repeatedly suggested limiting China's influence on the continent's political agenda. After Canberra called for an international investigation into the source of the coronavirus, Beijing imposed a series of trade restrictions.
Australian clean coal exporters fell sharply. New Hope Corp Ltd and China-controlled Yancoal Australia Ltd fell 12% in morning trading, while Whitehaven Coal Ltd fell 9% amid a slightly weaker market.
Diversified mining giant BHP Group Ltd, which has a stake in coal production, declined 2.5%.
At the WTO meeting, Australia expressed concern that China is taking action against Australian barley, wine, meat, dairy, live seafood, logs, timber, coal and cotton.
Australia is the main supplier of iron ore to China, and Chinese steelmakers on Friday called on the market regulator to investigate the recent spike in iron ore prices and take action on any possible misconduct.