International Food Fight

China announced on Friday, February 5th that it will impose anti-dumping duties on broiler chicken imports from the United States. China is the largest importer of chicken products from the US, imports of which reached 584,300 tons in 2008 and accounted for 20 percent of US exports and 75 percent of Chinese imports during the same period. Expected to come into effect on February 13th, duties of 43.1 and 80.5 percent will be placed on US exporting companies Tyson Foods and Pilgrim¡¯s Pride Corp., respectively.

The duties attempt to correct the disadvantage local producers experience as a result of US chicken product dumping. As a result of the ruling, it is estimated that China's monthly chicken imports will fall by 63,000 tons while increasing the cost of US products by about 0.05 yuan more per pound than Chinese chicken products.

Many believe these increased import duties are a reaction to recent Sino-American political tensions, including the U.S. arms sales to Chinese Taiwan, American pressure on China to appreciate its currency, as well as the recent U.S. tire ruling issue. It is not believed, however, that it will escalate into a trade war between the two nations.

Expressing the importance of these issues for the U.S. and China, Managing Director of Lehman, Lee, and Xu Edward Lehman commented, ¡°We at Lehman, Lee, and Xu understand the legal and economic effects these issues can have on Chinese companies invested in international trade. We encourage Chinese companies to consult with us with any corporate, investment, or international legal concerns they may have.¡±

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