The Ministry of Commerce said it was terminating (link in Chinese) the probe after receiving comments from the Chinese livestock industry saying the anti-dumping measures would be likely to push up costs, which would then be passed on to the public.
The announcement came during a visit by Vice Premier Liu He to Washington to discuss ways to address the trade imbalance between the world's 2 biggest economies.
BEIJING-China has ended an anti-dumping and antisubsidy investigation into imported USA sorghum, as the two countries work toward a deal to ease trade tensions.
The probe had additionally sparked fears amongst American farmers that they might lose their largest export marketplace for the crop. The grain is mainly used as an ingredient in liquor.More news: Egypt orders Gaza border to open during Muslim holy month of Ramadan
The United States accounts for more than 90 percent of total sorghum shipments to China, with imports from the USA worth just over $1 billion past year.
"Chinese negotiators are preparing to offer the administration a deal to buy up to United States dollars 200 billion worth of American goods, which would allow Trump to claim victory in his campaign to reduce the trade deficit with China and rebalance America's trade relationship with its biggest economic rival, according to people briefed on the deliberations", The New York Times reported.
The two countries have not yet implemented their tariff increases to reach a negotiated settlement.
A White House statement described the meetings as part of "ongoing trade discussions" and said Trump met the Chinese delegation led by Liu and the USA team led by Mnuchin.More news: Prince Charles to walk Meghan Markle down the aisle
On Friday, the Commerce Department said it would halt the probe and reimburse the deposits.
One U.S. source said earlier U.S. aircraft maker Boeing Co would be a major beneficiary of the Chinese offer to narrow the trade gap if Trump were to accept it. Boeing is the largest U.S. exporter and already sells about a quarter of its commercial aircraft to Chinese customers. "The next USA sorghum crop will be harvested in August", he told the news agency Reuters. The news brought some unexpected relief to Chinese buyers who still had cargoes stuck at ports.
"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". But Trump has expressed doubt they would be successful. "We just can't do that anymore", he said.More news: Boston Celtics: How to watch, listen and more