China Chicken Feet Trade Dispute Not Really About Chicken Feet

(MoneyWatch)  Are Tyson Foods and Pilgrim's Pride dumping chicken on China? That is, are they selling it below the cost of production? Mostly these companies are shipping feet and wings, which go for 2 cents per pound in the U.S. but get twenty times that in China, where chicken feet are considered a delicacy. The decision to ship these leftovers seems like no-brainer, and the prices are higher in China than they would be in the U.S., which is the opposite of dumping. But China still says that the companies are undermining the country's own chicken producers with low prices that are only enough to cover the U.S. companies' shipping costs.

In response, China is now imposing import taxes on chicken from the U.S. -- and the taxes vary by company. Pilgrim's Pride is at the higher end, with a tax of 80.5 percent, while Tyson will be paying a mere 43.1 percent.

Whether or not China's accusations have any merit, the timing suggests that chicken feet are not really the issue. China launched its chicken investigation just days after the Obama Administration imposed tariffs on Chinese tire imports, and there have been other tensions along the way, both between the U.S. and China and between China and the EU. The real issue, according to the Wall Street Journal, is the value of the yuan, which the rest of the world says is overvalued -- though Obama's decision to meet with the Dalai Lama can't have helped matters.

Related Stories on BNET Food: U.S. and China in Chicken Trade Fight