China Opens Inquiry Into U.S. Sorghum as Trade Tensions Worsen

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The ministry’s initiation of the investigation “suggests that the government had it teed up and it’s not a response or demand from the industry for protection,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

“It’s the government taking action, which is what you would expect if they are trying to send a message to retaliate,” Mr. Bown said.

Sorghum is a type of grain that is mostly used in China to feed livestock. It is also used to make baijiu, a clear liquor with a pungent aroma that sells well among the rich in China and is often served at banquets. More than three quarters of the sorghum the United States exports goes to China, according to the U.S. Grains Council, a grain export industry group.

The United States exported about 4.8 million tons of sorghum to China in 2017, worth about $1 billion, accounting for nearly all of China’s imports of the grain last year, according to Chinese customs data.

Retaliating against the agricultural sector is not a surprise. A United States business lobby group warned last week that Chinese officials have threatened to retaliate against American companies if the Trump administration imposes tariffs, saying that agricultural and aircraft imports may be the most at risk.

Mr. Bown said some farmers would suffer but the broader United States economy would not be substantially harmed if tariffs were to be imposed only on the sorghum industry. The worry is that, as trade frictions escalate, tariffs could spread to other, more economically important sectors such as soybeans, he said.

Soybean exporters are a powerful political constituency for Mr. Trump. China imported $14 billion worth of soybeans from the United States in 2016, according to data from the United States Department of Agriculture.

China, which in recent years has been increasingly assertive about protecting its economic interests, has not been afraid to use tariffs as a tool against the United States. In 2010, it said it would impose tariffs on American poultry after its own anti-dumping investigation. China opened the investigation in 2009, less than two days after former President Barack Obama imposed steep tariffs on Chinese tires.

Despite Sunday’s announcement, Mr. Li, of Shanghai JC Intelligence Company, said that he believes the Chinese government “is still exercising restraint.”

“China still believes there’s room for negotiation,” he said, “and hopes that the United States will return to the negotiating table.”

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