China's imports of U.S. chicken have plunged 90% since tariffs were… (Qilai Shen, Bloomberg )
Reporting from Beijing — The U.S. Trade Representative's office has filed a complaint with the World Trade Organization saying China violated international trade rules when it imposed anti-dumping and countervailing duties on U.S. chicken last year.
That will cost the U.S. poultry industry an estimated $1 billion in lost sales by the end of this year. China's tariffs have doubled the price of some cuts of chicken, making them too pricey for consumers here.
"China seems to have failed to observe numerous transparency and due-process requirements, failed to properly explain the basis for its findings and conclusions, incorrectly calculated dumping margins, incorrectly calculated subsidy rates and made unsupported findings of injury to China's domestic industry," the trade office said.
China's Ministry of Commerce on Wednesday defended the tariffs.
"China's anti-dumping measures follow the law and are in accordance with WTO rules," the statement said. "China will study requests from the U.S. carefully and handle them under the WTO's dispute settlement system."
China's imports of U.S. chicken have plunged 90% since the imposition of the tariffs, which are largely seen as retaliation for U.S. duties of 35% on Chinese tires.
The two countries are also sparring over steel, electronic payment services, wind energy equipment and industrial raw materials such as zinc and bauxite.
Before the battle over chicken erupted, U.S. poultry farmers enjoyed steady, high-margin sales of unwanted parts such as chicken feet to China.
In 2008, about half the $677 million worth of chicken sold to China were chicken feet, which are highly prized here. Known as "phoenix talons," they sold for up to 80 cents a pound compared with just pennies in the U.S., according to some published reports.
Although poultry is growing in popularity in China — KFC is the king of fast food in China and expanding rapidly — pork is still the meat of choice. By one estimate, Chinese consume three times as much pork — nearly 100 pounds per person a year — as they do chicken.
With pork supplies tight in China, U.S. hog farmers have seen their sales boom. China's purchases of U.S. pork have risen fivefold the first seven months of this year, compared with the same period last year, according to the state-owned China Daily.
China and the U.S. now have 60 days to resolve the chicken dispute on their own. If negotiations fail, the WTO can launch proceedings.