Published: Fri, May 18, 2018
Finance | By Loren Pratt

China drops anti-dumping probe of United States sorghum imports

China drops anti-dumping probe of United States sorghum imports

China denied on Friday that it had offered a package to slash the USA trade deficit by up to $200 billion, hours after it dropped an anti-dumping probe into US sorghum imports in a conciliatory gesture as top officials meet in Washington.

President Donald Trump's administration has proposed tariffs on as much as $150 billion in Chinese language merchandise to punish Beijing for requiring US firms to show over expertise in change for entry to China's market.

The Ministry of Commerce said it was terminating (link in Chinese) the probe after receiving comments from the Chinese livestock industry saying the anti-dumping measures would be likely to push up costs, which would then be passed on to the public.

"China is taking some goodwill measures", said one trader at an global company having soybean processing plants in China.

The probe had additionally sparked fears amongst American farmers that they might lose their largest export marketplace for the crop. The imports made up the bulk of Chinese imports of the grain used in animal feed and Chinese liquor.

It said that higher sorghum prices would eventually impact on consumers.

China Chinese shipping port cargo Guangzhou Guangdong
Shipping containers are seen at Nansha terminal of Guangzhou port in Guangdong province China

Economists say it is far from clear how China could achieve a $200 billion reduction in the trade deficit with the United States - unless US exporters, already running at or near full capacity, were to divert goods destined for other countries to China instead, a development that would only shift trade flows and not cut the global USA deficit.

The ministry said it would also fully repay deposits paid by USA sorghum importers since April. "The next United States sorghum crop will be harvested in August", he told the news agency Reuters.

China's vice premier, Liu He, met with President Donald Trump and a US negotiating team led by Treasury Secretary Steven Mnuchin on Thursday in the first of two days of talks. "We are now saved", said a private sorghum trader who had over 600 tonnes of USA sorghum stranded at a Chinese port. But it is still just a drop in the bucket compared to the overall trade deficit in goods, which reached $375 billion a year ago.

The Commerce Ministry stated it was ending the anti-dumping probe as a result of it could have raised prices for customers.

Chinese buyers have slowed soybean purchases in recent weeks. But Trump has expressed doubt they would be successful. Bloomberg News cited a Trump administration official as saying that Beijing sought to cut its surplus by $200 billion annually, matching a demand by the USA made earlier this month.

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