DDGS iStock Photo by Michael Hendricks
DDGS is a byproduct of ethanol production used for animal feed.
Photo courtesy of iStock/Michael Hendricks.
 
BEIJING, CHINA — China raised tariffs on imports of U.S. distillers dried grains (DDGS) from the preliminary level it first announced in September 2016 after the U.S. launched a trade enforcement at the World Trade Organization (WTO). 

China’s Ministry of Commerce said on Jan. 11 that anti-dumping duties would range from 42.2% to 53.7%, up from its 33.8% preliminary decision made on Sept. 23.

"The U.S. Grains Council is deeply disappointed in this series of events that is a severe departure from our industry's three decades of broad, cooperative work with China's government and livestock industry and that follows a year of extensive cooperation on the part of the U.S. DDGS and ethanol industry with MOFCOM investigations,” said Tom Sleight, president and chief executive officer (CEO) of the U.S. Grains Council (USGC). "The decisions in the anti-dumping and countervailing duties investigations are not supported by the evidence and raise serious questions regarding the Ministry's compliance with standard anti-dumping and countervailing duties procedures and with China's international obligations. While painful and damaging to the U.S. DDGS industry, their 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 and less access to affordable, wholesome pork, poultry and dairy products.”

The U.S. is the largest DDGS producer and has a surplus to export, while China is the biggest importer. DDGS is a byproduct of ethanol production used for animal feed.   

“The Chinese tariffs are negatively impacting the U.S. ethanol industry’s exports, of not only ethanol, but our co-product of Dry Distillers Grain, a high-quality animal feed that is favored by Chinese livestock producers and is the largest export market for U.S. DDGS,” said Mark Marquis CEO of Marquis Energy. “These tariffs are the poster child of bad trade deals. It is our opinion that the Chinese calculations are not in line with WTO trade rules.”

This action by China is the latest in an ongoing trade battle with the U.S.

The U.S. Trade Representative (USTR) has taken action and is looking into China’s tariff-rate quota for rice, corn and wheat as well as its level of domestic support for Chinese producers of rice, wheat and corn.