China threatens to cut off imports of U.S. chicken following new American tariffs on Chinese tires

Responding to new U.S. tariffs on Chinese tires, the Chinese government is threatening to cut off imports of American poultry, "a development that some trade experts feared could escalate," Clifford Krauss reports for The New York Times. American poultry executives expressed fear of losing the largest export market for U.S. chicken, Krauss writes, but remain optimistic since their importers have told them to keep shipments coming.

Exports of American poultry totaled $4.34 billion in 2008, with China getting $854.3 million, less than two percent of the industry's revenue when domestic sales are included, Krauss reports. Industry executives say their business with China was particularly profitable because of the nation's demand for chicken wings and feet, almost half the chicken exported to China, Krauss reports. Those pieces are worth only a few cents a pound in the U.S. but fetch 60 to 80 cents a pound in China.

Two weeks ago the U.S.A. Poultry and Egg Export Council, the National Chicken Council and other American food organizations sent a letter to Ron Kirk, the U.S. trade representative, warning that action against China could lead to retaliation. Daniel Griswald, a trade expert at the Cato Institute warns Krauss that the poultry industry has a lot to lose: “If we are playing a game of chicken with China we are going to be big losers.” (Read more)

The Chinese government says investigations have been launched after manufacturers' complaints that American chicken and automotive products have entered the country's markets in an "unfair competition manner" hurting local industries, Rita Jane Gabbett of Meatinplace.com reports. "The Chinese are saying it's not related to the tire tariffs, but I think we know better than that," Toby Moore, vice president of communications for U.S.A. Poultry and Egg Export Council told Gabbett. (Read more, subscription required)