US/China politics: Quick View - China begins investigating US sorghum imports
- Content Type
- Country Data and Maps
- Economist Intelligence Unit
- No abstract is available.
- International Relations, Politics, News Analysis, Forecast
- Political Geography
- United States, China
On February 4th China's Ministry of Commerce announced that it would conduct anti-dumping and anti-subsidy investigations into US sorghum imports.
The investigation comes almost two weeks after the US imposed import tariffs on foreign solar cells and modules and household washing machines. The US trade measures, despite being non-nation specific, were largely understood to target products from China (and South Korea). Data from the US International Trade commission indicate that whereas Chinese products accounted for only 18% of total US solar cell imports in 2016 (in US dollar terms), Chinese products accounted for more than 50% of total US residential washing machine imports over the same period.
China is the second-largest market for US agricultural exports, and we had previously expected that retaliatory measures taken by China in response to US trade actions would target that sector. The impact of the investigation into sorghum imports, however, will not be immediate: the commerce ministry has given both probes a year to conclude, with extensions available until August 2019 under special circumstances. The ministry also said that any countries (or producers) affected by the measures would have 20 days either to submit comments regarding the process or to apply to take part in the investigation. Moreover, the value of sorghum products, which China began importing only in 2013, made up just 5% of total US agricultural exports to China in 2016 (latest available annual data); a more painful target would have been US soybean exports, which constitute the majority of US agricultural exports to China.
The Chinese commerce ministry's measures indicate that, although the investigation represents a "warning shot" to the US, trade tensions remain relatively contained. Nevertheless, the bilateral relationship appears increasingly frayed. The US administration released several documents on national defence and nuclear weapons policy in mid-January and early February, respectively, describing China as both a strategic competitor and a revisionist power.
The US president, Donald Trump, has yet to announce the results of the Section 301 investigation. However, we still expect him to reveal the results of the numerous ongoing US trade investigations at some point in the first quarter of this year, with concrete trade actions adopted shortly after.
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