Rice: U.S.- China Trade Dispute Heats Up on Rice Imports

The United States has provided the latest salvo in the escalating trade dispute with China, and for the first time has taken aim at rice imports.

Details of the President’s announcement that increased duties are to be applied on $200 billion of imports from China became available last week.

Among the imports targeted for an extra 10% in duties are rice imports from China. Late last week, the President in a press interview said that duties could be imposed on an additional $500 billion in imports from China, but there has been no follow-up guidance from the administration.

“While our focus remains on opening the China market, it’s hard to accept at the same time that China has access to the domestic U.S. rice market, especially now that imports of Chinese rice into Puerto Rico are surging,” said Bobby Hanks, chairman of the USA Rice International Trade Policy Committee and a Louisiana miller.

“The President’s decision to include rice from China in the latest list is positive, especially because China has placed an extra 25-percent duty on imports of U.S. rice, even though we can’t ship there.”

Following the President’s direction on July 10 for the U.S. Trade Representative (USTR) to begin the process of imposing tariffs of 10% on an additional $200 billion in imports from China, the USTR’s office published on July 17 a request for comments on tariff lines, including brown, fully milled, and broken rice, to be subject to the extra duties.

A hearing will be held on August 20 to assist USTR in developing a final list.  At this time, there is no publicly available timeline for when the extra duties may be imposed.

China has long had access to the U.S. market, but imports from China are up substantially since 2016, and this surge is attributed to sales of medium grain rice to the U.S. territory of Puerto Rico.

Puerto Rice is a traditional market for southern medium grain, and there is great concern that continued shipments could displace long-term domestic shipments.

Imports from China more than trebled to 12,000 metric tons in 2017 and imports in January-May of this year are up 81 percent over the same period in 2017.

“It’s hard to see how imports from China make commercial sense when comparing wholesale price data in China to reports of landed prices in Puerto Rico.

“At a minimum, we should be able to sell to China if they can sell here, and we’ve asked U.S. officials to take appropriate action to prevent unfair access by China to this domestic market, Hanks said. “We need access to China and we want China’s additional duties of 25 percent removed, and in the meantime, rice being imported from China should face a similar 25 percent duty. Reciprocity is only fair.”

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