China just announced huge tariffs on $1 billion of US sorghum

Beijing has announced it will impose steep anti-dumping duties on the $1 billion worth of sorghum which US producers sell to China, amid a simmering trade row between the world’s two largest economies.

The Chinese government will require US companies to pay a significant provisional tariff on sorghum shipments to China, after concluding that the trade has caused damage to China’s homegrown sorghum industry.

Last year, Chinese companies bought 4.8 million metric tons of sorghum from the US, worth about $1 billion, according to Chinese customs data. Most of the grain is made into animal feed, while a small amount is used in alcohol production.

On Tuesday, the Ministry of Commerce announced a provisional tariff of 178.6% on all incoming US sorghum shipments.

The measure takes effect on Wednesday. It was announced just two months into an anti-dumping investigation to determine whether the product is being sold to China at artificially low rates, harming the domestic market.

But in an apparent olive branch to carmakers, China also announced on Tuesday the elimination of ownership restrictions on foreign vehicle makers. Currently, foreign carmakers must set up joint ventures with Chinese partners, leading to the transfer of proprietary technology to China.

China launched anti-dumping and anti-subsidy investigations into sorghum imports in February, less than two weeks after Trump slapped tariffs on imports of solar panels and washing machines.

The tariffs will cause further worries among American farmers after China threatened tariffs on US wheat, soybeans and pork earlier this month.

“Such anti-dumping measures depend a lot on two countries’ trade relationships,” said Zhang Yan, an analyst at agriculture consultancy Shanghai JC Intelligence.

“This time it was largely a result of the ongoing trade dispute. It will not only hurt sorghum producers, but also cause worries for corn and soybean farmers.”

Ministry of Commerce official Wang Hejun said in an online statement on Tuesday that the provisional measures were aimed at stopping unfair trade practices.

“China is willing to expand cooperation with the US to reduce our disagreements over trade,” Wang said.

The two countries have been in a stand-off since Donald Trump proposed tariffs on $50 billion worth of Chinese goods, to punish what he called discriminatory policies and intellectual property theft.

China fired back by announcing duties on American products, and Trump later threatened to impose additional tariffs on $100 billion more Chinese imports.

The final result of the sorghum investigation is expected to be announced by February 2019.