About those DDGs in China...

Written by dkoplow Posted: 02/8/2011 2:8 PM EST

Last April when dried distillers grains DDGs started showing up in far flung markets, the industry touted it as an example of their global competitiveness.  I was thinking subsidy arbitrage was more likely.  Seems like the subsidies are closer to the truth.  Philip Brasher summarizes the pending trade case launched by China for dumping DDGs.  He notes that the case is likely retaliation for a case the US launched against China for subsidies to renewable energy industries such as wind and solar.  It is likely that both the US and Chinese cases have merit, and that the existing subsidies do, indeed, result in substantial distortions in trade patterns.  It is also likely that politics, rather than economics, is more likely to drive their resolution.