For Chinese families, chicken is the fastest growing source of dietary proteins. Chicken accounts for one-third of China’s meat consumption. When U.S. poultry producers recognized this marketing opportunity, they began aggressively exporting to China. U. S. poultry’s market share quickly increased from 0.58 percent in 2011 to 40.6 percent by the end of 2014.
Beijing imposed countervailing duties on U. S. poultry in 2012 due to the import influx. The U.S. challenges this “tax” and, in 2013, the World Trade Organization (WTO) ruled in favor of the U.S. In response to the WTO ruling, China undertook a reinvestigation, and in July 2014, Beijing issued a statement justifying their duties on U.S. poultry products. After two years of debate, on August 24, 2016, China announced that they would renew the duties on U. S. firms shipping poultry products into China for the next five years.
Michael Froman, The U.S. Trade Representative, immediately filed an additional complaint with the WTO stating that the U.S. will “hold China accountable for the unfair taxes that are being imposed on U.S. exports by broiler chicken products.” In support of the U.S. Trade Representative’s action, Senator John Isakson (Georgia) said, “Trade works when the rules are followed, and it is imperative that China – lives up to the rules it agreed to when it joined the WTO in 2001.”
The WTO will now set up a panel of experts to assess the U.S. claim. If the WTO again rules in the U.S.’s favor and China fails to comply with the ruling, the TWO could authorize the U.S. to impose retaliatory duties on Chinese imports – perhaps starting the “US-China Chicken Trade War.”