China Raises Anti-Dumping, Anti-Subsidy Taxes on U.S.-Made Animal Feed
(Beijing) — China started levying hefty anti-dumping and anti-subsidy tariffs on Thursday on U.S. corn products used as animal feed — the latest development in a slew of trade disputes between the world’s two largest economies.
Punitive tariffs on U.S.-made dried distillers grains with or without soluables (DDGS) have been raised to 42.2% to 53.7%, up from the original de facto 33.8% tax that the ministry imposed in September, the Ministry of Commerce said Wednesday. The government held proceeds from the taxes as a “deposit” until the final ruling.
The ministry announced its final ruling in an investigation that had been prompted by complaints from local suppliers in November 2015.
Chinese companies had said corn subsidies in the U.S. were indirectly benefiting U.S. suppliers of DDGS, allowing them to flood the Chinese market.
DDGS is a corn-based byproduct from the ethanol industry used by animal breeders as a substitute for corn and soymeal.
Chinese buyers now must pay anti-subsidy duties of 11.2% to 12.0%, up from the 10.7% required by the ministry since September.
Both duties are slapped on top of after-tax prices and will be collected for five years, the ministry said.
The case is expected to worsen already frayed Sino-U.S. trade relations, which have been threatened by the protectionist rhetoric of U.S. President-elect Donald Trump, who will assume office next week.
Almost all DDGS that China imports comes from the U.S. The country bought 6.8 million tons of the feed ingredient worth $2.0 billion from the U.S. in 2015, up from $1.8 billion for 5.4 million tons in the previous year, Chinese customs data showed.
China accounted for nearly half of U.S. exports of the product from October 2014 to September 2015, but the figure dropped to about one-fourth last year, the U.S. Department of Agriculture said in a report in December.
The ministry investigation found that the market share of DDGS supplied by American producers, traders and their Chinese partners targeted in the probes rose from 41.6% at the beginning of 2012 to 70.2% in the first nine months of 2015, the ministry said in a separate statement. That hurt local companies, who were forced to reduce prices despite rising costs.
The ruling came after Washington last month requested that the World Trade Organization intervene over Beijing's management of a tariff quota for some crop imports that allegedly cost American farmers billions of dollars in potential exports.
Days before that, China lodged a suit with the WTO accusing the United States and the European Union of failing to comply with the international trade body's rules to stop using "surrogate pricing" to calculate anti-dumping tariffs on Chinese imports.
Trump’s election win has added further uncertainties to bilateral trade relations as he promised during his campaign to name China a currency manipulator in his first day of office and threatened to slap a 45% tariff on imports from the country.
Contact reporter Fran Wang (fangwang@caixin.com)

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