[BEIJING] China has increased punitive tariffs on imports of a U. animal feed ingredient known as distillers' dried grains (DDGS) from levels first proposed last year, potentially escalating a trade spat between the world's two largest economies.

In its final ruling, the Commerce Ministry said on Wednesday that anti-dumping duties will range from 42.2 per cent to 53.7 per cent, while anti-subsidy tariffs will be between 11.2 per cent and 12 per cent.

That is up from anti-dumping duties of 33.8 per cent and anti-subsidies of 10 per cent to 10.7 per cent in its preliminary decision in September.

The move followed a probe that found the domestic DDGS industry had "suffered substantial harm" due to subsidised imports from the United States, the government said.

The decision is a big blow to the US ethanol industry, including global traders Archer Daniels Midland Co (ADM) and Louis Dreyfus, along with Poet LLC, oil refiner and ethanol producer Valero Energy Corp and grains group Andersons Inc.

The rates will take effect from Thursday and be in force for five years.

DDGS is the dried residue of grains left over after the distillation process that produces ethanol.

REUTERS