In the escalating trade war between China and the US, Beijing is taking aim at American farmers, a key support group for Donald Trump.
Today (April 17), the Chinese commerce ministry announced the importers of US sorghum must pay a hefty deposit worth 178.6% of the value of shipments, effective tomorrow. The preliminary action follows an anti-dumping and anti-subsidy investigation launched in February, after the US imposed tariffs on Chinese solar panels and washing machines. It was announced hours after Washington banned American firms from selling parts to Chinese telecoms giant ZTE for seven years.
The ministry said in a statement (link Chinese) that local businesses were “substantially damaged” by American sorghum imports—mostly used in China to feed livestock or make liquor. US sorghum exports to China were worth just over $2 billion in 2015, and closer to $1 billion over the past two years. In the first two months of 2018, the value of sorghum exports to China rose by 30% year over year, according to the US Department of Agriculture.
More than 80% of all US sorghum exports now goes to China, according to the US Grains Council, an industry group. Texas and Kansas, solid Republican-voting states, produce the bulk of America’s sorghum crop.
Earlier this month, the Chinese commerce ministry threatened to impose a 25% duty on US agricultural products, including soybeans, wheat, and beef, in response to the US proposal to levy duties on Chinese high-tech goods. Neither of those actions has taken effect yet.
Prior to the proposed agricultural tariffs, Beijing imposed punitive duties on $3 billion worth of US imports, including pork, in retaliation for US tariffs on Chinese steel and aluminum products worth the same value. Iowa, America’s top pork-producing state, voted for Trump in 2016 but went to the Democrats in the previous two presidential elections.
As the tit-for-tat trade battle continues, the two sides’ strategies are becoming clear: The US sees China’s technology ambitions as the area where it can impose maximum damage, while China is targeting politically inconvenient groups for Trump in hopes of exerting the most leverage.