China-US relations

China launches anti-dumping probe into US sorghum imports as trade tensions rise

Beijing’s investigation comes after US imposed tariffs on imports of solar panels and washing machines

PUBLISHED : Sunday, 04 February, 2018, 6:37pm
UPDATED : Sunday, 04 February, 2018, 6:37pm

China has launched an anti-dumping and anti-subsidy investigation into imports of sorghum from the United States, the Ministry of Commerce said on Sunday, less than a fortnight after US President Donald Trump slapped steep tariffs on imports of solar panels and washing machines.

Beijing’s action is expected to immediately hit demand for the upcoming US sorghum crop, exports of which are largely used to feed China’s huge livestock sector, and send shivers through the entire US farm sector.

China is the top buyer of US sorghum as well as soybeans, the United States’ most valuable export to the world’s No 2 economy.

“I personally believe this is China’s response to Trump’s action on washing machines,” said Li Qiang, chief analyst at agriculture consultancy Shanghai JC Intelligence.

“If he takes any further measures, they will consider soybeans,” he added.

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The US shipped 4.76 million tonnes of sorghum to China in 2017, the bulk of China’s roughly 5 million tonnes of imports of the grain that year, and worth around US$1.1 billion, according to Chinese customs data.

That makes it almost twice as valuable as exports of Chinese aluminium alloy sheet to the US, also subject to recent trade action by Washington, which is being seen as another possible trigger for Beijing’s move.

Like the US aluminium probe, China’s commerce ministry investigation into sorghum was self-initiated.

The ministry said it had initiated the investigation because the local industry included a large number of small growers who were unable to prepare the necessary documentation.

Preliminary evidence and information found that imported sorghum from the US had been exported at a lower than normal value, it said, damaging local producers.

The trade action comes a year after Beijing slapped hefty anti-dumping and anti-subsidy duties on imports of distillers dried grains (DDGS) from the US, another product used as a feed ingredient, although it recently reduced VAT on DDGS imports.

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Exports of US soybeans to China are also under pressure from stiff competition from rival exporter Brazil, with export sales hitting a seven-month low last week.

The investigation into sorghum dumping will be carried out for the period from November 1, 2016 until October 31, 2017, while an investigation of industrial injury will be from January 1, 2013 until October 31, 2017, the commerce ministry statement said.

The investigation should be complete by February 4 next year, it said, but could be extended until August 4, 2019.