China’s Ministry of Commerce announced its preliminary findings in the matter on Tuesday (April 17) and said it would be increasing its tariffs on sorghum imported from the US by 178.6%, for a certain period. The change is set to take effect from today.
“National Sorghum Producers (NSP) is deeply disappointed in the preliminary antidumping determination issued today by China’s Ministry of Commerce (MOFCOM),” the organization said. “US sorghum is not being dumped in China, and US sorghum producers and exporters have not caused any injury to China’s sorghum industry.”
The trade group said the decision by China reflects a broader trade fight in which US sorghum farmers are the victim, not the cause. "US sorghum farmers should not be paying the price for this larger fight."
The producers’ organization and other stakeholders have cooperated with the investigations and provided data to demonstrate that the feed grain is not being dumped in the market, said NSP. “None of this information appears to have been seriously considered or used in today’s preliminary determination, which is neither fair nor appropriate,” the group added.
“Understanding the serious impact this preliminary decision will have on our farmers, NSP and our partners will continue to demonstrate US sorghum farmers are not injuring China,” the organization said. “We are evaluating all legal options moving forward.”
China originally announced that it would be investigating US sorghum exports for dumping and causing damage to Chinese producers in February.
The expectation was for the review to take several months to a year, Tim Lust, CEO of the NSP, said when the process was announced.
“What we can speak to is our commitment to the Chinese market and our great Chinese customers and partners,” he told us at that time. “We don’t dump or unfairly subsidize our products, and we aren’t injuring anyone. We hope that sensible minds and a fair investigation will prevail so that we can focus on the win-win sorghum trade between US farmers and China.”
Sorghum market development
Sorghum is one of the most common cereal grains produced in the US, reported the US Grains Council. In 2016/17, the main importers of the US crop were China, Mexico and Japan.
Overall, exports were about 6.04m metric tons, a drop of 30% from the previous year, but an improvement on the five-year average, said the USGC. China imported about 4.8m metric tons, while Mexico had about 568,000 tons followed by Japan with 183,000 metric tons.
Additionally, total prospective planting for sorghum was expected to increase in the US for the coming growing year, reported the US Department of Agriculture (USDA). The total crop acreage was expected to be 5.9m up from 5.6m in 2017.
The two states with the largest forecast crop are Kansas with 2.7m acres and Texas at 1.6m, the USDA said. However, Missouri saw the largest anticipated increase in planting at 300%.
Trade spat overview
China’s decision on the preliminary outcome of the anti-dumping, countervailing duty investigation comes after multiple weeks of trade debate between the US and China.
The US administration recently announced a hike in tariffs on steel and aluminum imports and China responded in kind, declaring an increase in levies on several products from the US including pork and ethanol.
The US also said it was considering increasing tariffs on a list of 1,300 Chinese products in the outcome of an investigation into China’s practices relating to intellectual property, technology transfer and innovation. That process remains in progress with a public meeting on the matter set for May 15.
In response to that decision, China said it would be hiking tariffs on a range of other produce from the US including soybeans, corn, sorghum and some beef products. However, no timeline for implementation of those fee increases has been set.
The Trump administration also recently asked the Office of the US Trade Representative (USTR) to consider adding another $100bn in tariffs to Chinese products. It is unclear where that sits at this time though.
On Monday, the US Department of Commerce banned American firms from selling parts or software to Chinese company, ZTE Corp, for a period of seven years - that decision was first reported by Reuters.