China to the US Chicken Industry: Pay Taxes on Your Chicken

Today China made an official ruling that for the next five years, US chicken producers can expect anywhere from a 4-30% tax on any chicken parts or uncooked birds they expect to import into China. Here is a list of the major US producers and the tariffs the Chinese government has imposed:

• Tyson Foods Inc. 12.5 percent duty
• Pilgrim's Pride Corp. 5.1 percent
• Perdue Farms Inc. 7.4 percent

While China claims that U.S. producers benefit from government subsidies that disadvantage Chinese competitors, analysts are just calling this another shot in the ongoing trade war between the US and China. Currently the US is responsible for about 70% of China's imports.

Why are the rates different for each company? The "official" reason, given by China's Commerce Ministry, is that the duties were based on alleged US subsidy rates- meaning how ever much money the Chinese government thinks the US is giving each chicken company to help cover the costs of producing and exporting chicken, the Chinese government will charge that company in taxes.

Further Reading:
The AP release on the situation
The Times of India has an in depth report