China hits US sorghum imports with deposit
beijing — China said on Tuesday it will slap a hefty temporary deposit on imports of US sorghum after finding the US grain has damaged the domestic industry in a preliminary antidumping ruling, stirring trade tensions between the world’s top two economies.
CHS and other US companies will have to put a 178.6 per cent deposit on the value of sorghum shipments to the country in what Beijing called a “temporary antidumping measure” as the government continues to probe imports of the grain.
Trade sources said the deposit or fee was much higher than they had expected and will likely bring US imports to a halt and inflate prices of alternatives, such as barley. Sorghum is used in livestock feed and the fiery Chinese beverage baijiu.
The deposit, which trade experts equated with a duty, is effective from Wednesday, the Ministry of Commerce said in a statement. It is the latest shot by Beijing at its top trading partner in a mounting trade spat, likely aimed at major American farm states that backed US President Donald Trump.
“It’s very high. Basically US sorghum won’t be able to come in,” said Fan Jingya, grains analyst at Cofco Futures.
The move comes out of an anti-dumping investigation launch just two months ago in retaliation for aggressive trade actions by Washington, including steep tariffs on solar panels and washing machines.
The United States shipped 4.76 million tonnes of sorghum to China in 2017, worth around $1.1 billion and making up the bulk of China’s roughly 5 million tonnes of imports of the grain last year, according to Chinese customs data.
Other companies likely to be affected are Archer Daniels Midland — a top seller of US sorghum into China — along with Cargill and Louis Dreyfus.