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China to impose penalties on US chicken

world Updated: Feb 05, 2010 09:59 IST

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China said on Friday it would slap stiff penalties on a variety of US chicken meat it says is being sold at an unfairly low price, in the latest move sure to increase the pressure on strained Sino-US relations.

The commerce ministry, in a preliminary ruling, said importers of US broiler chicken in China would have to pay deposits based on the difference -- up to 105.4 percent -- between the meat's normal value and the alleged cut price.

"Broiler products imported from the United States were dumped (in China) and the domestic broiler sector has suffered material damages" as a result, the ministry said in a statement on its website.

The measure is to take effect on February 13. The ministry did not say when a final ruling would be made on the issue.

Dumping occurs when a foreign company sells a product in another market at less than normal value.

China formally launched an anti-dumping and anti-subsidy investigation into US chicken meat imports in September after receiving complaints from domestic producers.

That move came a day after the US slapped steep tariffs on imported Chinese tyres.

Ties between the two nations are badly strained over a number of issues -- from the value of the Chinese yuan and trade disputes to US arms sales to Taiwan and US President Barack Obama's plans to meet the Dalai Lama.

On Wednesday, Obama again piqued China's ire by saying his administration had decided to get "much tougher" about enforcement of existing trade rules.

Beijing hit back, saying "wrongful accusations and pressure" would not help resolve Sino-US disagreements.

The United States and China are also at odds over Internet freedom, after Google threatened to pull out of the communist nation following what it says were cyberattacks on the email accounts of Chinese human rights activists.