U.S. Grain Ships Abruptly Change Course after China Imposes Tariff

At least five U.S. grain ships packed with sorghum changed course Friday just hours after China imposed higher tariffs on the grain. Around 1.2 tons of USA-made sorghum will have to return home amid an ongoing trade war between Washington and Beijing.

On Friday, an armada of twenty ships ferrying the grain reached China, but five of them had to make a U-turn after hearing that the deposit was hiked to 178% overnight. Earlier this week, China accused the U.S. of dumping low-priced sorghum on the country’s market, which has harmed local farmers.

Sorghum is a key ingredient in the country’s baijiu liquor production, as well as an important feed for livestock.

Beijing announced Friday that it will start imposing a deposit of 178% of the entire value of grain shipments. Within hours of the announcement, five cargos shipping sorghum from Texas to China changed course. U.S. ship operators said that the deposit would have led to losses.

China Hikes Tariffs on U.S. Grain Shipments

China explained that the new levy is the consequence of an earlier investigation on the U.S. imports’ impact on local companies and farmers. The investigation was spurred by Washington’s decision to up the tariffs on washing machines and solar modules coming from China in February.

At the time, the Trump administration explained that cheaper Asian washing machines and solar panels killed local businesses.

While the White House accuses China of unfair trade policies, China accuses the U.S. of harming local farmers. After President Donald Trump promised to place higher tariffs on $150 billion in Chinese merchandise, China eyed a similar measure for U.S. imports.

Earlier this week, U.S. regulators barred local companies from doing business with China’s largest telecom equipment manufacturer ZTE. U.S. companies are also barred from purchasing network equipment from Chinese companies over national security concerns.
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