China Trade War Could Affect Food Industry

Last Updated Sep 15, 2009 11:12 AM EDT

The U.S. decision to put tariffs on Chinese tire imports could lead to retaliatory measures impacting the food industry.

China is not happy about the new tariffs and it's filing a complaint with the WTO -- despite the fact that WTO agreements explicitly allow temporary tariffs in the case of a market-disrupting import surge.

China is also investigating possible dumping by U.S. poultry companies, as well as auto companies. The Chinese government said it's looking into "some" companies and whether they illegally sold goods for less than the cost of production, but it didn't specify which ones.

The National Chicken Council says the investigation is completely unjustified and was only initiated in response to the tire tariffs. Others in the food industry, including meat trade groups and companies like Hormel and Tyson Foods, previously expressed concern that tire tariffs could lead to retaliatory measures on the part of China.

The meat industry has opposed the tariffs since they were first proposed by United Steelworkers, which said Chinese imports were hurting U.S. jobs. The union called for a 55 percent tariff on tires, though the actual tariff is only 35 percent and will drop 5 percent every year.

Some have expressed fears of a "retaliatory spiral," though presumably the WTO agreements would limit which protective measures could actually be taken. China has also stated it does not want a trade war with the U.S.

  • Katherine Glover