China Drops Probe Into US Sorghum Shipments

Thomas Peter  Reuters

Thomas Peter Reuters

China's Commerce Ministry announced on Friday that it was ending a probe because it concluded that "anti-dumping and countervailing measures" on U.S. sorghum imports would negatively affect Chinese consumers.

The United States accounts for more than 90 percent of total sorghum shipments to China, with imports from the US worth just over $1 billion a year ago.

"As I understand, the relevant consultations are ongoing and they are constructive", he said, adding that he could not elaborate on the specifics of the negotiations.

The announcement came as U.S. trade officials held talks in Washington with Chinese Vice Premier Liu He, who is President Xi Jinping's top economic adviser.

The Chinese Commerce Ministry said Friday the investigation, which started in January, found that imposing anti-dumping duties on USA sorghum would increase living costs for Chinese consumers.

The Commerce Ministry said it was ending the antidumping probe because it would have raised costs for consumers.

Shipping containers are seen at Nansha terminal of Guangzhou port, in Guangdong province, China, June 14, 2017.

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

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.

The probe had sparked worries that tariff-inflated costs for the grain would be passed onto feedmakers and eventually push retail meat prices higher.

"The United States officials and the Chinese delegation also participated in a meeting with President Donald J Trump at the White House". Beijing still threatens to slap aggressive 25 percent tariffs on a swathe of US farm goods, including sorghum and soybeans.

That top-line number in the Chinese offer would largely match a request presented to Chinese officials by Trump administration officials in Beijing two weeks ago.

"Chinese negotiators are preparing to offer the administration a deal to buy up to United States dollars 200 billion worth of American goods, which would allow Trump to claim victory in his campaign to reduce the trade deficit with China and rebalance America's trade relationship with its biggest economic rival, according to people briefed on the deliberations", The New York Times reported.

The two biggest USA exports to China were aircraft at $16 billion previous year, and soybeans, at $12 billion. The imports made up the bulk of Chinese imports of the grain used in animal feed and Chinese liquor.

"China has taught a lesson to the United States and showed how it can hurt USA exports", said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. "The next USA sorghum crop will be harvested in August". "We are now saved", said a private sorghum trader who had over 600 tonnes of USA sorghum stranded at a Chinese port.

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