Ships laden with more than 1.2m tonnes of US sorghum bound for China may have no where to go amid the ongoing trade tensions between Beijing and Washington.
Twenty ships carrying more than $216m worth of sorghum were at sea on Friday, according to Reuters, but least five of them had changed course within hours of China’s announcement this week that it would place stiff tariffs on the grain.
On Tuesday, Beijing said US importers had been dumping the grain, used for animal feed as well as China’s traditional baijiu liquor, on the Chinese market and harming Chinese farmers.
China’s ministry of commerce said it would begin requiring deposits of 178.6% of the value of grain shipments. The five diverted sorghum ships, all loaded in Texas, would have had to pay that deposit, rendering their shipments unprofitable, Reuters reported.
China said the new requirements on sorghum imports were the result of a previous inquiry. In February, after the US placed tariffs on Chinese solar panels and washing machines, China started its own investigation into the impact of US imports on Chinese businesses.
The world’s two largest economies have been locked in a tit-for-tat tariff war over what the White House insists is unfair Chinese trade policy. Donald Trump has threatened tariffs on as much as $150bn in Chinese imports. Beijing has promised to levy major US exports to China, including grains, agriculture, food products, vehicles, and aircraft.
US regulators this week took aim at Chinese technology companies, banning American companies from selling parts or software to telecom equipment maker ZTE. US telecom firms will also be barred from buying equipment from foreign companies deemed a security risk, a move likely to hurt Chinese telecom Huawei as well as ZTE.
In a statement on Friday, ZTE called the US measures “very unfair” and said the company “could not accept” them. China’s ambassador to the US, Cui Tiankai, said at an event on Friday at Harvard University that his country would retaliate if the US insisted on a trade war, according to China’s state news agency Xinhua.
Cui said a trade fight would not only harm both economies but “poison the atmosphere” of the two countries’ relationship, according to Xinhua.