Market News & Headlines >> U.S. Challenges China's Grain Supports

The United States is challenging China’s domestic price supports for rice, wheat and corn at the World Trade Organization as excessive, alleging that last year they totaled nearly $100 billion above limits China committed to when it joined the WTO in 2001.   

The U.S. Trade Representative's office said China's "market price support" program for these grains constituted an artificial government incentive for Chinese farmers to increase output. According to the USTR’s analysis, China has maintained domestic prices at levels above world market levels since 2012, influencing domestic production decisions and distorting the Chinese market. 

"These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO," U.S. Trade Representative Michael Froman said in a statement. "We will not stand by when our trading partners fail to follow the rules like everyone else." 

Froman was joined by U.S. Secretary of Agriculture Tom Vilsack and by bipartisan members of Congress in announcing the complaint. Vilsack noted China has gone from a $2-billion per year market for U.S. agricultural products to a $20-billion-plus market because of tariff cuts and the removal of other trade barriers. “But we could be doing much better, particularly if our grain exports could compete in China on a level playing field,” Vilsack said. “We see substantial opportunities to meet import demand for grains in China if China is willing to operate a WTO-consistent trade regime,” he added.