Getting lost in the shuffle of the back-and-forth trade tariffs between the U.S. and China is an ongoing investigation into U.S. sorghum.
“The Chinese Ministry of Commerce may announce a preliminary duty tomorrow and I wouldn’t be terribly surprised,” said Tom Sleight, CEO of the U.S. Grains Council (USGC).
China announced it was launching anti-dumping, countervailing and anti-subsidy investigations into the U.S. sorghum industry Feb. 4. The announcement wasn’t long after President Trump slapped steep tariffs on Chinese solar panels and washing machines.
“Forget what happened the last 12 hours or so,” said Sleight referring to a potential 25 percent tariff on U.S. sorghum announced by China Wednesday. “There’s still this investigation that’s active and ongoing in China.”
China began its probe into sorghum after accusing the U.S. of unloading the crop at unfairly low prices.
“Certainly, on the subsidy, we are not illegally subsidizing our farmers,” said Tim Lust, CEO of the National Sorghum Producers (NSP). “The United States has a long-standing tradition of following the World Trade Organization (WTO) process.”
The U.S. faced a Wednesday deadline dealing with a questionnaire. Now, the Chinese government will make a decision on how to proceed.
“Usually there is some sort of a timeline, about 30 or 60 days where [the Chinese] could conceivably issue a preliminary duty,” said Sleight.
“If they follow a previous practice, they may have a hearing. With the trade environment we are in right now, who knows if that will happen or not.”
Earlier this week, China released a list of 106 different U.S. agricultural products, including sorghum, it may retaliate against with a potential 25 percent tariff. It’s one more reason the National Sorghum Producers saying retaliation threatens U.S. sorghum farmers who are already vulnerable.
“Unfortunately, this is not the first time sorghum farmers have faced depressed prices and market uncertainty,” said NSP in a statement. Sleight says going into 2018, the planting season could be double-trouble with prices and the possibility of tariffs on top of an active investigation with China.
“If we lose that market for sorghum, there isn’t an immediately available, readily market we know we can start to tell to and pick up that slack,” said Sleight.
Sleight says countries such as Spain and Portugal have interest in U.S. sorghum. However, he fears some countries may want to see the sorghum price drop, something farmers don’t want to hear.
The U.S. is the leading producer of sorghum globally and is the largest supplier of sorghum to China.