China's hike to import taxes on US distillers' grains is
evidence of a growing rift with the US on ag trading, the US Grains Council
said, warning that that "we are less than welcome in their market".
The council - a non-profit export promotion body whose members
include top's agribusinesses such as Archers Daniels Midland, Bunge and Case -
said that Beijing's decision to lift import taxes on US distillers' grains, or
DDGs, was part of a "series of events that is a severe departure" from previous
Chinese importers of DDGs will, for five years starting on
Thursday, pay an anti-dumping duty of 42.2-53.7%, plus an 11.2-12% anti-subsidy
tax - up from rates of 33.8% and 10-10.7% respectively imposed in September,
amid claims by Beijing of dumping by the US.
However, the complaints are "not supported by the evidence
and raise serious questions regarding… compliance with China's international
obligations," the council's chief executive, Tom Sleight said, adding that the
duty was part of a trend of growing detachment in relations.
'Less than welcome in
Beijing's move "is the latest in a rash of measures taken by
the Chinese government to restrict access to that market for US feed grains", Mr
"It came just 10 days after action by the Chinese
government to dramatically increase tariffs on imported US ethanol from 5% to
3%, effectively stopping a growth market for US farmers and ethanol producers."
Furthermore, US farmers "continue to wait for China's
approvals of biotech corn events, which last happened in 2014", and without
which US exports to China risk breaching GM curbs.
Mr Sleight added that the "implication" of these moves was "clearly"
that the council was "less than welcome in their market, and this will
challenge the extent of our engagement with China" after 35 years.
'Just a shooting star'
The warning comes amid a growing focus on US-Chinese relations
after Donald Trump, who will be inaugurated as US president on January 20, in
the run up to his election condemned China as a currency manipulator, and
threatened US import tariffs of up to 45% on Chinese goods.
Mr Trump has also offended Beijing by breaking with traditional
US policy on Taiwan, and appointed China "hawks" including Peter Navarro, Robert
Lighthizer and Wilbur Ross to his administration.
Chinese state media have, in return, issues a series of
cautions to Mr Trump, warning him for instance "not try to boss China around"
on economic and security issues.
An editorial in the Global Times newspaper, which is affiliated
to China's ruling Communist party, said: "May the arrogant Americans realise
that the United States of America is perhaps just a shooting star in the ample
sky of history."
The US Grains Council added in its comments on the import duties
that "protectionist trade restrictions based on false allegations do not
benefit" either the US, for which the latest tax moves would prove "painful and
damaging" for the DDGs industry, or China.
Indeed, the levies' "biggest negative impact will ultimately
be on China's feed and livestock industries, which risk losing access to an
important and cost-effective feed ingredient, and on millions of Chinese
households that will likely face greater food price inflation".
DDGs, manufactured as a byproduct of grain ethanol output,
are used as a high protein ingredient in livestock feed, often as an
alternative to soymeal, or to corn.
China is attempting, through measures such as subsidising
consumption and ditching a guaranteed pricing scheme for farmers, to erode its
huge state stockpiles of corn.
'Most likely culprit'
However, China, a major importer of many agricultural
commodities, including palm oil, pork, soybeans and sugar, relies on US supplies
to meet much of this demand.
Earlier this week, the country was seen as the buyer of
120,000 tonnes of US spring wheat, which the US Department of Agriculture said
had been sold to an "unknown" importer.
"The sale got the attention of traders, and sent most
scrambling to determine who was buying panamaxes of spring wheat," said Tregg
Cronin at US broker Halo Commodity Company.
"The most likely culprit would be China as traders whispered
with some thinking another 2-4 panamaxes may have been conducted and could
therefore be announced yet this week."
US trade data this week also showed that China brought 19m
gallons of 121.9m gallons of US ethanol exported in November.