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China halts U.S. sorghum dumping probe amid signs of trade thaw


By Tony and Steve Holland

BEIJING/(Reuters) - said on Friday it was dropping an anti-dumping probe into imports of U.S. sorghum, a conciliatory gesture as top officials meet in in an effort to head off a trade war between the world's two biggest economies.

Beijing's announcement that it was ending its investigation, which effectively halted a trade worth roughly $1.1 billion last year, came hours after U.S. officials familiar with the matter said was offering a package to slash the U.S. trade deficit by up to $200 billion.

"The imposition of anti-dumping and anti-subsidy measures on imports of sorghum originating from the would have a widespread impact on consumer living costs, and does not accord with the public interest," said in a statement.

of China's offer of trade concessions and increased purchases of American goods came during the first of two days of U.S.-trade talks in focused on resolving tariff threats between the two countries. However, it was not immediately clear how the total value was determined.

One of the U.S. sources said U.S. would be a major beneficiary of the Chinese offer to narrow the trade gap if were to accept it. Boeing is the largest U.S. exporter and already sells about a quarter of its commercial aircraft to Chinese customers.

Another person familiar with the talks said the package may include some elimination of Chinese tariffs already in place on about $4 billion worth of U.S. including fruit, nuts, pork, wine and sorghum.

A statement described the meetings as part of "ongoing trade discussions" and said met the Chinese delegation led by and the U.S. team led by

"The officials conveyed the President's clear goal for a fair trading relationship with China," the said.

The top-line number in the Chinese offer would largely match a request presented to Chinese officials by administration officials in two weeks ago.

But getting to a $200 billion reduction of the U.S. China trade deficit on a sustainable basis would require a massive change in the composition of trade between the two countries. The U.S. goods deficit was $375 billion last year.

The United States' two biggest exports to China were aircraft at $16 billion last year, and soybeans, at $12 billion.


The shipped 4.76 million tonnes of sorghum to China in 2017, worth around $1.1 billion, accounting for the bulk of Chinese imports of the grain used in animal feed and Chinese liquor.

In April, China forced U.S. sorghum exporters to put up a 178.6 percent deposit on the value of sorghum shipments to the country after launching an investigation in February following Trump's imposition of steep tariffs on imports of solar panels and washing machines.

"China has taught a lesson to the United States and showed how it can hurt U.S. exports," said Ole Houe, director of at brokerage in

"Now they are showing goodwill by halting its anti-dumping investigation into sorghum imports, but it is a cheap way of showing goodwill as the U.S. doesn't have much sorghum left to export. The next U.S. sorghum crop will be harvested in August," Houe said.

Some China trade watchers expressed scepticism that a $200 billion reduction in the trade gap could be achieved quickly and said the offer may include repackaged commitments previously announced by China.

"That's an enormous number and it suggests that there could be some impressively ambitious accounting," said Scott Mulhauser, a former at the in and U.S. who now advises companies on trade issues.

Agreeing to a deal focused primarily on reducing the trade deficit could also weaken Trump's original tariff goal of pressuring China to end policies that his administration says are aimed at misappropriating U.S. technology - a bigger structural change for China's state-driven economic model.

The U.S. officials did not have details on China's demands in exchange for the concessions.


Trump criticised China earlier on Thursday as being "very spoiled" on trade with the United States but said he was aiming for an overall deal with

Trump told reporters at the China had "ripped off" the United States for too long and that he told Chinese that "we just can't do that anymore".

He also said possible modifications to crushing restrictions that have paralysed Chinese could be part of a trade deal. He said on on Sunday he had ordered the to put ZTE back in business.

Trump said he agreed to Xi's request to look into the matter and that ZTE bought a lot of components from U.S. companies.

"Anything we do with ZTE, it's just a small component of the overall deal. I can only tell you this: We're going to come out fine with China. Hopefully, China will be happy, I think we'll be happy," Trump said.

Trump has threatened to impose tariffs on up to $150 billion of Chinese goods to combat what he says is Beijing's misappropriation of U.S. technology through joint venture requirements and other policies. Beijing has threatened equal retaliation, including tariffs on some of its largest U.S. imports, including aircraft, soybeans and autos.

(Reporting by Tony in BEIJING and in WASHINGTON; Additional reporting by and in WASHINGTON, Hallie Gu and Michael Martina in BEIJING, and Naveen Thukral in SINGAPORE; Editing by Paul Tait)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 09:32 IST