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Amid trade talks, China drops anti-dumping probe into U.S. sorghum imports

Employees scoop sorghum into vats at the Kweichow Moutai Co. distillery Maotai, China, on Dec. 14, 2017. Bloomberg photo by Qilai Shen.

BEIJING - China ended an anti-dumping investigation into imports of U.S. sorghum on Friday, May 18, a possible concession or goodwill gesture as key talks are underway in Washington over the trade dispute between the two nations.

China's vice premier, Liu He, met with President Donald Trump and a U.S. negotiating team led by Treasury Secretary Steven Mnuchin on Thursday in the first of two days of talks.

China entered the talks offering a package of trade concessions and increased purchases of American goods aimed at cutting the U.S. trade deficit by $200 billion, according reports by news agencies. However, China's Foreign Ministry said this was "not true."

"According to my information, the consultation is still underway and it is constructive," said spokesman Lu Kang at a regular news conference.

The announcement on sorghum imports came from the Commerce Ministry in Beijing on Friday morning, and was not explicitly linked to the trade talks.

Indeed, the ministry said it had concluded that the anti-dumping and anti-subsidy measures it had imposed on the sorghum imports in April would affect the cost of living for Chinese consumers and were not in the public interest. Kang told journalists not to "overinterpret" the announcement.

But the move will inevitably be seen as a gesture aimed at improving the environment in Washington as trade talks continue Friday.

The probe had sparked concerns among American farmers that they might lose their largest export market for the crop. But it is still just a drop in the bucket compared to the overall trade deficit in goods, which reached $375 billion last year.

China imported $956 million of sorghum from the United States last year, according to the Commerce Ministry.

Economists say it is far from clear how China could achieve a $200 billion reduction in the trade deficit with the United States - unless U.S. exporters, already running at or near full capacity, were to divert goods destined for other countries to China instead, a development that would only shift trade flows and not cut the global U.S. deficit.

China is also asking the United States relax export controls banning the sale of many high-tech products to China, something Washington is loath to agree to.

Separate Chinese tariffs on around $3 billion of U.S. products including fruit, nuts and pork were imposed in March in response to Trump's decision to slap tariffs on iron and steel imports.

The Wall Street Journal reported earlier this week that the two sides were closing in on a deal to relax restrictions on Chinese telecoms equipment maker ZTE in return for China removing tariffs on U.S. agricultural products and easing roadblocks faced by U.S. semiconductor company Qualcomm.

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Story by Simon Denyer. Denyer is The Post’s bureau chief in Beijing. He previously worked as The Post's bureau chief in New Delhi; a Reuters bureau chief in Washington, New Delhi and Islamabad, Pakistan; and a Reuters correspondent in Nairobi, New York and London.

Luna Lin contributed to this report.