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* China to assess duties of 43.1-105.4 pct on chicken parts
* Rising trade and currency tensions
* US chicken industry's profitable China business
(Adds AmCham statement, final duties date in paras 5, 11)
By Lucy Hornby and Niu Shuping
BEIJING, Feb 5 China will levy heavy
anti-dumping duties on U.S. chicken products, its Commerce
Ministry said on Friday, a move likely to aggravate trade
relations and antagonise one of the few U.S. industries that
profitably exports to China.
The ministry's initial investigation showed that U.S.
companies had dumped chicken products into the Chinese market,
according to the ministry's website (www.mofcom.gov.cn).
The preliminary tariffs were announced a day after China
requested a World Trade Organisation ruling on European Union
duties on shoes made in China. That was the most recent of many
cases demonstrating China's embrace of the WTO to keep markets
open to the exports on which it depends.
The United States and China are engaged in a series of
trade disputes, particularly over the value of the Chinese
currency, with President Barack Obama this week vowing to get
tough in dealing with complaints that U.S. exports are at a
"The world needs strong U.S.-China economic engagement now,
not a ratcheting up of trade tensions," said Michael Barbalas,
president of the American Chamber of Commerce in China.
Chicken wings and feet, virtually worthless in the U.S.
market, are a delicacy in southern China. Many U.S. poultry
producers count on the Chinese market to round out their
"Chicken feet and wings are not wanted in the U.S. so they
sell them to China, they dump them below cost," said Wang
Xiulin, president of the Chinese Poultry Association.
"For over a decade, the U.S. has sent big volumes of
chicken to the Chinese market, hurting producers here. Last
year, the Chinese poultry industry was really hurting so we
asked for this investigation."
Tyson Foods (TSN.N), an active investor and lobbyist in
China, got the lowest duty of 43.1 percent. Pilgrim's Pride
Corp. PPC.N was hit with an 80.5 percent duty. Most other
firms, including Sanderson Farms (SAFM.O), face a 64.5 percent
Those that did not appeal the finding would pay duties of
105.4 percent, the ministry said.
Duties go into force on Feb 13, or Chinese New Year's Eve,
ensuring the price of the popular delicacies remain steady for
holiday shoppers already fretting about vegetable inflation.
The rates could be adjusted in the final ruling, in several
GAME OF CHICKEN
The U.S. poultry industry had been lobbying for Congress to
revoke a prohibition on U.S. inspectors certifying Chinese
cooked poultry plants, a prohibition that China is fighting at
That prohibition is lifted in the latest Congressional
budget, although U.S. inspectors have yet to tour Chinese
plants. The author of the prohibition had cited food safety
concerns if cooked chicken were imported from China, which has
undergone a series of food safety scandals, including the
delibrate lacing of milk with melamine, a chemical product that
causes kidney stones.
China began its investigation in U.S. chicken parts after
the U.S. imposed safeguard duties on Chinese-made tyres, which
China is fighting at the WTO [ID:nLDE60I1H8].
The new tariffs could close a lucrative market for the U.S.
poultry industry, which supplie more than ¾ of China's
Chicken feet and wings fetch about 2 U.S. cents per pound
in the U.S., but land in China at about 42 U.S. cents - a
figure that Chinese rivals say represents the cost of the
A flat import tax of 500 yuan ($73) a tonne and a 13
percent value-added tax mean U.S. wings and feet can enter the
Chinese market at about 54 cents a pound - compared to the
Chinese wholesale price of about 76 cents.
Additional duties mean that U.S. imported chicken parts
will cost about 5 cents per pound more than their Chinese
(Writing by Lucy Hornby; Editing by Ron Popeski)