China launches anti-dumping investigation into US sorghum imports

[TaiShang]

China launches anti-dumping investigation into US sorghum imports

CGTN
2018-02-04

China has launched an anti-dumping and anti-subsidy investigation into imports of sorghum grown in the US, the Ministry of Commerce (MOFCOM) said in a statement on Sunday.

"This is a normal case of trade remedy investigations," said Wang Hejun, head of the ministry's Trade Remedy and Investigation Bureau.

Preliminary evidence and information found that the US government had subsidized its sorghum exports, and that the volume of US sorghum exported to China had increased substantially since 2013, with the prices lower than the normal value, the ministry said, noting that local producers were damaged as a result.

The ministry said it had ordered the investigation because the local industry included a large number of small growers who were unable to prepare the necessary documentation. The launch of the investigation is in accordance with the relevant laws of China and the World Trade Organization rules.

VCG Photo

The investigation into sorghum dumping will be carried out for the period from November 1, 2016 until October 31, 2017, while an investigation of industrial injury will be from January 1, 2013 until October 31, 2017, said the ministry.

The investigation should be complete by February 4, 2019, it said, but can be extended until August 4, 2019.

Beijing’s move is expected to immediately hit demand for the upcoming US sorghum crop, exports of which are largely used to feed China’s huge livestock sector, and could send shivers through the entire US farm sector.

China is the top buyer of US sorghum as well as soybeans, the US’ most valuable export to the world’s second-largest economy.

The US shipped 4.76 million tonnes of sorghum to China in 2017, the bulk of China’s roughly five million tonnes of imports of the grain that year, and worth around 1.1 billion US dollars, according to Chinese customs data.

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China will hit the US back on its heavily subsidized agriculture. The US farmer will feel the pain. Dotard does sanctioning by shouting out loud. China does it silently. Let's see which one will hurt most.

@Jlaw , @AndrewJin , @Chinese-Dragon

 

[dy1022]

Great, more and more will coming

 

[cirr]

With sorghum warning shot, Beijing targets Trump's core farm base

Reuters | BEIJING

Last Updated at February 6, 2018 03:05 IST

By Dominique Patton and Michael Martina

BEIJING (Reuters) - In launching a probe into U. S. sorghum imports, China has fired a warning shot across its top trading partner's bow that shows farmers in states that voted for U. S. President Donald Trump may be Beijing's top retaliatory target in the event of a trade war.

On Sunday, the Ministry of Commerce launched an anti-dumping and anti-subsidy investigation, potentially leading to hefty tariffs on imports of the ingredient used in livestock feed and the fiery Chinese liquor baijiu.

It comes less than a fortnight after Trump slapped steep tariffs on imports of solar panels and washing machines and two months after Washington's decision to investigate Chinese aluminium alloy sheet, the first U. S.-initiated anti-subsidy and anti-dumping probe in decades.

Those moves had rekindled concerns among global policymakers and markets of a U. S.-China trade war.

The United States accounts for more than 90 percent of total sorghum arrivals in China. U. S. imports were worth just over $1 billion last year.

The commerce ministry said it had initiated the investigation because the local industry included a large number of small growers who were unable to prepare the necessary documentation.

Chinese Foreign Ministry spokesman Geng Shuang said the issue was an "individual, normal trade remedy investigation case".

Deploying the rarely used tactic of self-initiating, rather than responding to complaints from farmers, suggests the probe had been in the works for some time, and was viewed by trade experts as retaliation for recent U. S. actions against China.

U. S. Commerce Secretary Wilbur Ross said China should conduct the investigation openly and transparently. "Politics play no role in anti-dumping and countervailing duty investigations in the United States, and should not affect the outcomes of the trade investigations conducted by foreign nations," Ross said in a statement.

The U. S. Trade Representative's office, which could seek a World Trade Organization challenge against any anti-dumping decision by China, declined to comment. The National Sorghum Producers and trade group U. S. Grains Council each said they would cooperate with an investigation.

China has used other niche farm products such as distillers' dried grains to hurt the United States in recent years.

But taking aim at sorghum at a time when the global grain market is in surplus and growers around the world are scrambling to find homes for their products hits at Trump's core political base while avoiding damaging supplies of a product critical at home.

Texas and Kansas, major Republican strongholds or "red states", produce most of the U. S. sorghum crop.

"They believe that if they ratchet up the heat in key red states where there's a large agricultural community that's voted for Donald Trump that it will somehow change the situation," said Paul Burke, Asia director at U. S. Soybean Export Council.

While many sorghum traders in China were surprised by the news, they said they would likely switch to buying from the nation's ample supplies of locally grown corn instead. China's state reserve is big enough to feed the country for a year.

POLITICAL RESONANCE

Business executives had expected Beijing to target commodities, a major U. S. export to China, in any response to the escalating trade dispute.

Last week Lester Ross, chairman of the policy committee at the American Chamber of Commerce in China, told reporters that China would take aim at sectors with "political resonance in the United States", such as commodities and aircraft.

With Trump threatening further action on steel and aluminium imports from China as well as alleged Chinese intellectual property rights abuses, the conflict could escalate further.

Many Chinese experts think politicians in Washington are not prepared to pay the heavy economic and political price needed to upset trade dynamics between the world's two largest economies, including a large Chinese trade in goods surplus.

But some business executives warn that invoking a Cold War-era trade law to impose tariffs on steel and aluminium could trigger a trade war, which could expand to other more critical commodities, such as soybeans, the United States' biggest agricultural export by value worth more than $12 billion last year.

China's commerce and agriculture ministries told a delegation of U. S. soy growers last September that soybeans were being considered as a target for retaliatory action, Burke said.

"We're watching the situation very closely," he told Reuters on Monday.

(Reporting by Dominique Patton and Michael Martina; Additonal reporting by Hallie Gu and Ben Blanchard in Beijing, Michael Hirtzer in Chicago and David Lawder in Washington; Writing by Josephine Mason)

 

[TaiShang]

BEIJING (Reuters) - In launching a probe into U. S. sorghum imports, China has fired a warning shot across its top trading partner's bow that shows farmers in states that voted for U. S. President Donald Trump may be Beijing's top retaliatory target in the event of a trade war.

Indeed, this is just a warning shot. The US may end up losing more than it hopes to gain eventually. Waging trade war against China is like debtor threatening the lender with financial retaliation.

US must go back to its military as an ultimate (and only) working foreign policy instrument.

US best export is its military.

 

[TaiShang]

China probes US sorghum subsidies

by Wang Hui, CGTN
2018-02-06

The Chinese Ministry of Commerce recently launched an anti-dumping and countervailing investigation into sorghum imports from the US to China.

The head of the ministry's Trade Remedy and Investigation Bureau, Wang Hejun, said this is a normal case of trade remedy investigations. China imported more than five billion tones of grain sorghum, most of which was from the US.

Beijing says the investigation is a necessary move to protect Chinese farmers’ rights. The statement says preliminary evidence and information found that the US government had subsidized its sorghum exports and that the volume of US sorghum exported to China had increased substantially since 2013. The falling prices impact China’s local producers.

/CGTN

The figures from the ministry of commerce show that from 2013 to 2017, the price of US sorghum exports to China fell from 290 dollars per ton to less than 200 dollars.

/CGTN

The volume has multiplied over 20 times, leading its market share in China to increase to almost 60 percent from 8 percent.

/CGTN

The US government subsidies have depressed prices for Chinese growers, which fell over 150 US dollars per ton in the past five years. It has affected China’s grain sorghum sector.

The ministry said it ordered the investigation because the local industry included many small growers who were unable to prepare the necessary documentation. The inquiry should be completed by February 4, 2018, but can be extended until August 4.

There is some trade friction between China and the US recently. About two weeks ago, the US decided to impose safeguard tariffs on global imports of solar products and sizeable residential washing machines.

Some people view China’s investigations into the US exported sorghum as retaliation for America’s investigations into the Chinese products. But the Ministry of Commerce says this is a routine trade remedy investigation. And it was launched according to the relevant laws of China and World Trade Organization rules.

A reporter recently asked Wang, whether there will be a trade war between the two countries.

“We are concerned about a trade war, and we don’t want to see one between China and the US. It will not only negatively affect the two countries’ economies, but also the global economy. As the trade volume between the two countries is large, trade friction in some sectors is inevitable. But it is vital to manage these, and not let them affect the economic and trade cooperation," Wang replied.

The Chinese Ministry of Commerce has reiterated the importance of collaboration between the two countries on several occasions.

The ministry also pointed out that the two countries are important trading partners, and win-win cooperation is the nature of their bilateral economic and trade relations. It said China would like to handle trade friction through dialogue, based upon equality, mutual respect, and mutual benefit.

 

[siegecrossbow]

Seems like a move designed to target Trump's voter base.

 

[TaiShang]

Seems like a move designed to target Trump's voter base.

Precision counter-sanctions. The point is to teach the US that they have much less economic sanctioning powers against China they they think.

I do not know when was it last time the US checked the value of US investment into (and US-led exports from) China as well as the share of the US market in China's exports.

I do not know what make them think they can slap China without being slapped back harder.

 

[cirr]

Highest U.S. trade deficit in 9 years reported

2018-02-08 13:14 China Daily Editor: Wang Zihao

The United States saw its largest trade deficit in nine years in 2017, jumping 12.1 percent to $566 billion.

Its trade deficit with China increased by $28.2 billion to $375.2 billion, according to the U.S. Commerce Department's report released on Tuesday covering the country's international trade in goods and services.

In December alone, the U.S. deficit grew by 5.3 percent to $53.1 billion. But the US-China trade deficit declined 13 percent in December due to a 7.5 percent jump in U.S. exports and a 7.6 percent fall in imports.

The Commerce Department's report shows that much of the U.S. trade deficit resulted from strong import demand in the country.

The U.S. has been running a constant trade deficit since 1976, with trade deficits with 99 trading partners in 2016.

A surging economy and the tax cut bill that came into effect in January have both contributed to increasing the U.S. trade deficit, complicating U.S. President Donald Trump's promise to bring it down.

"The larger U.S. trade deficit is absolutely not the fault of China or Mexico," said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics.

Hufbauer, former deputy assistant secretary for international trade and investment policy of the U.S. Treasury from 1977 to 1979, said the large deficit simply reflects the strong dollar in the first half of 2017 and the strong U.S. economy.

"If Trump once again blames trade agreements, other countries should tune him out," he told China Daily on Tuesday.

The Trump administration has repeatedly talked about fair and reciprocal trade as a way to blame the U.S.' trade partners for its trade deficits.

Derek Scissors, a resident scholar at the American Enterprise Institute, said that Trump has never made demands or given details of what an acceptable trade imbalance should be.

"A truly fair and reciprocal trade will not have zero trade imbalance. That doesn't make any sense," he said on Tuesday.

Scissors said that U.S. consumers have much higher purchasing power than any other consumers in the world. "Of course we will run a trade deficit," he said. "The U.S. economy is much greater than, much richer than and growing faster than the Mexican economy. How is it that Mexico can buy as much from the U.S. as the U.S. buys from Mexico? That obviously doesn't make any sense."

http://www.ecns.cn/business/2018/02-08/292025.shtml

 

[TaiShang]

Its trade deficit with China increased by $28.2 billion to $375.2 billion, according to the U.S. Commerce Department's report released on Tuesday covering the country's international trade in goods and services.

I think China will not allow the US to enjoy any better trade situation with China than it is now.

The opening of China's home market will target mostly the developing countries to attach them more firmly into China's consumption power. This will be a strategic asset to be used if necessary, just as how South Korean companies suffer now.

German Mercedes Benz should suffer, too, because of its implicit support of separatist terrorist D. L'lama in their recent Weibo post.

Trade should be weaponized only against countries that disrespects China's sovereignty and territorial integrity.

 

[TaiShang]

I wonder what would happen to GM if China also launched an investigation against them?

GM reports US$3.9 bln loss for 2017