Beijing: China will impose temporary anti-dumping deposits on US grain imports from Wednesday, adding to trade tensions between the world’s biggest economies. Soybean meal futures climbed on concerns the oilseed could be targeted next.
Imports will incur a 178.6% duty, China’s Ministry of Commerce said in a preliminary ruling on Tuesday. That’s in compliance with domestic law and World Trade Organization (WTO) rules, Wang Hejun, chief of the trade remedy and investigation bureau at the ministry, said in a statement.
China began a probe into sorghum imports from the US in early February, just weeks after US President Donald Trump slapped tariffs on imported solar panels and washing machines. Tensions between the countries have since escalated after Trump ordered levies on steel and aluminium, with plans for more on products from China. The Asian nation, the largest buyer of American sorghum, has responded with tariffs of its own and potentially more to come.
“The rate is quite high and some buyers may have to cancel shipments," said Li Qiang, chief analyst with Shanghai JC Intelligence Co. A rally in domestic corn prices since late last year has prompted domestic feed mills to increase purchases of the grain from the US, he said.
China imported about 4.8 million metric tons of sorghum from the US last year, worth about $957 million, according to customs data. Purchases in the first two months of 2018 were 11% lower than a year earlier.
Soybean meal for September delivery on the Dalian Commodity Exchange climbed 2% to close at ¥3,265 ($520) a ton. The most-active contract climbed more than 2.5% in the final 20 minutes of trading. The sudden spike reflects tensions in the market about the state of China-US trade relations, said Cao Yanhui, an analyst at Guosen Futures Co.
“Market participants might translate the temporary deposit of sorghum as the start of a new round of trade disputes between China and the US, triggering concerns over soybeans," said Monica Tu, an analyst at Shanghai JC Intelligence. China is the biggest buyer of US soybeans.
China said earlier this month that it planned to levy an additional 25% tariff on about $50 billion of US imports including soybeans. The move matched the scale of proposed US tariffs announced a day earlier. The US is allowing 60 days for public feedback and hasn’t specified when the tariffs would take effect, leaving a window open for talks.