China's Commerce Ministry announced on Friday that it was ending a probe because it concluded that "anti-dumping and countervailing measures" on USA sorghum imports would negatively affect Chinese consumers.
The Commerce Ministry announced the halt Friday, saying punitive measures on imports of the grain would "affect the cost of living for consumers" in China.
The ministry said it would also fully repay deposits paid by United States sorghum importers since April.
The announcement was a possible sign Beijing is willing to make a deal with Washington, amid talks between senior United States and Chinese officials aimed at averting a trade war between the world's two biggest economies.
President Donald J. Trump's administration has proposed tariffs on up to $150 billion in Chinese products to punish Beijing for requiring USA companies to turn over technology in exchange for access to China's market.
The investigation began in February after the USA imposed new tariffs on imports of Chinese solar panels.
Another person familiar with the talks said the package may include some elimination of Chinese tariffs already in place on about $4 billion worth of USA farm products including fruit, nuts, pork, wine and sorghum.
"Now they are showing goodwill by halting its anti-dumping investigation into sorghum imports, but it is a cheap way of showing goodwill as the USA does not have much sorghum left to export".
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The two biggest US exports to China were aircraft at $16 billion past year, and soybeans, at $12 billion. "The next USA sorghum crop will be harvested in August", he told the news agency Reuters.
Chinese buyers have slowed soybean purchases in recent weeks.
China's Commerce Ministry said on Thursday that the government in Beijing hoped to resolve the trade frictions during the latest round, ending Friday.
"This is great news!"
China imported $956 million of sorghum from the United States a year ago, according to the Commerce Ministry. Beijing still threatens to slap aggressive 25 percent tariffs on a swathe of US farm goods, including sorghum and soybeans.
"Now they are showing goodwill by halting its anti-dumping investigation into sorghum imports, but it is a cheap way of showing goodwill as the USA doesn't have much sorghum left to export".
"The United States officials and the Chinese delegation also participated in a meeting with President Donald J Trump at the White House".
"The damage has been done, and mainly to the domestic buyer", said Cherry Zhang, analyst at Shanghai JC Intelligence Co Ltd.