By: Ainsley Brown
The seemingly endless trade rows between the United States and China continue unabated.
What is it this time? Tires? Steel? Autos? Or maybe intellectual property protection? No, no, not this time, this time it’s chicken – more specifically the importation of US chicken into the Chinese market.
This however is not a new skirmish but rather one that begun earlier this year when China imposed anti-dumping duties in February in the range of 43.1% and 105.4% on imported US chicken after a preliminary investigation showed dumping; see here. A few months later China then imposed countervailing duties, a first for China on an agricultural product, of up to 31.4% due to the subsidies US chicken producers receive (the complaint is largely about the state aid that goes to corn and soybean that make up chicken feed); see here.
It is important to note that the anti-dumping duties imposed in February were imposed pending furthering investigation. Well the investigation has been concluded and the results are in –Dumping. According to the Chinese imported US chicken is been sold at below market value and has caused material injury to their domestic producers. The new duties range from 50.3%- 105.4% and apply to whole chickens, chicken parts and chicken feet, however, they do not apply to cooked chicken products.
These tariffs will come as a huge blow to US producers, as the US had become the number one source of imported chicken in China. In fact, chicken is one of the only areas in which the US enjoys a trade surplus with China.
If there is some positive news for US chicken producers in all of this is that not all of them will be affected in equally. For those that co-operated with the Chinese investigation, like Tyson Foods and Pilgrim’s Pride Corporation, will pay a lower duty (50.3%-53.4%) and fro those that did not, well a 105.4% duty greets them in Chinese ports.