* Temporary deposit as high as 178.6 pct effective on Wednesday
* Beijing discovers that US throws sorghum, damages national industry
* Beijing launched an investigation in retaliation for US commercial actions
* Deposit higher than expected; Imports are now "dead", traders say (Update everywhere)
By Dominique Patton and Josephine Mason
BEIJING, April 17 (Reuters) – China said on Tuesday it will apply a heavy temporary deposit on imports US sorghum after finding the US grain has damaged the domestic industry in a preliminary anti-dumping decision, stirring trade tensions between the two major economies of the world.
CHS Inc and other US companies will have to deposit a 178.6 percent deposit on the value of sorghum shipments to the country in what Beijing called a "temporary anti-dumping measure" while the government continues to investigate grain imports.
Commercial sources said that the deposit or tariff was much higher than expected and would likely stop US imports and inflate alternative prices, such as barley. Sorghum is used in cattle feed and baijiu Chinese fire liquor.
The deposit, which trade experts matched with a tariff, goes into effect as of Wednesday, the Commerce Ministry said in a statement. It is Beijing's latest shot at its main trading partner in a growing trade dispute, probably aimed at the major US agricultural states that backed US President Donald Trump.
"It's very high, basically, US sorghum will not be able to enter," said Fan Jingya, grain analyst at Cofco Futures.
The move comes from an anti-dumping investigation launch just two months ago in retaliation for Washington's aggressive commercial actions, which include heavy fees on solar panels and washing machines.
The United States sent 4.76 million tons of sorghum to China in 2017, with a value of about $ 1.1 billion and constituting the bulk of the approximately 5 million tons of grain imports from China per year past, according to Chinese customs data.
Other companies that could be affected are Archer Daniels Midland, one of the leading sellers of American sorghum in China, along with Cargill and Louis Dreyfus.
The government said on Tuesday it found that the domestic industry was "substantially damaged" by imports of US sorghum. UU They are being poured into the country. He said he will issue a final ruling at a later date, but he did not give a timeline.
ELEVATION FEEDING PRICES
Prices of soybean and rapeseed meal used in animal feed increased when the move sparked concern that China would also impose sanctions on soybeans and other agricultural products from the United States as which increases the dispute.
The world's leading soybean importer threatened earlier this month to impose tariffs on sorghum, soybeans and other 104 US products. UU
The deposit scheme is additional to that proposal.
The restriction of grain imports is considered one of the most powerful weapons in Beijing's arsenal in the growing dispute with the United States. This would hit Trump's central political base at a time when the global grain market is in surplus and producers around the world struggle to find homes for their products.
Soybean was the largest agricultural export from the United States to China last year for a value of $ 12 billion.
Still, trade experts and farmers say that limiting imports of ingredients for livestock feed could raise prices locally, hurting China's vast agricultural sector and potentially inflating retail prices of pork in the world's largest consumer of meat.
Traders, who had rushed to increase imports before the decision, were reeling from the scale of the deposit on Tuesday. A trader at an international firm estimated that there are more than two million tons of sorghum in the water in the direction of China.
"We were expecting 35 percent," said a source at another international trade house. "Sorghum imports are now dead, and no one can afford that large amount of tariffs."
Imports are usually high in April and May, but shipments are likely to be diverted to other points in Asia, operators said.
"I do not know what (the importers) will do, but it will be hard," said the first trader.
Report of Josephine Mason and Dominique Patton; Additional
Hallie Gu reports; Edition of Tom Hogue