China to take a swipe at American sorghum in trade retaliation?

Business & Technology

The Chinese Ministry of Commerce has a sore spot with American sorghum, the New York Times reports (paywall).

  • The grain, widely used for cattle feed, is also a primary ingredient in China’s most popular liquor, baijiu.
  • China imported about $1 billion worth of the stuff, or 4.8 million tons, in 2017, with nearly all of it coming from the U.S.
  • Now the Ministry of Commerce believes that the U.S. may be unfairly subsidizing or dumping the product, and has started an investigation into the matter less than two weeks after the Trump administration slapped tariffs on Chinese solar panels and washing machines.
  • This could lead to tariffs on American sorghum, and Chinese agricultural investors know it. Reuters reports that corn futures on the Dalian Commodity Exchange “were up 0.7 percent at 1,817 yuan ($288.53) per tonne, on track for their biggest daily rise in a month.”
  • Both the Times and Reuters noted that the investigation into sorghum had not been requested by the agriculture business in China, meaning that it is more likely that the product has been targeted by Beijing for trade retaliation.