The trade tensions between the US and China are heating up, as the two export-thirsty superpowers are engaging in a sort-of tit-for-tat game of retaliation.
The US Congress is currently in the process of cooking up penalties for China due to its stubbornness regarding the yuan, while China is lashing back at US companies.
The latest is a poultry tax.
China’s commerce ministry announced on its Web site that it would impose import tariffs on American poultry of up to 105.4 per cent. It said the tariffs reflected the result of its own antidumping investigation, which looked at whether the United States was harming China’s poultry industry by exporting chicken parts for less than it cost to produce them.
According to the report, the investigation into poultry dumping was started a year ago, after Obama introduced a tariff on Chinese tire imports.
And what’s funny about that is that just last month, a business group determined that that tariff accomplished exactly nothing in terms of saving US jobs in the tire industry. It was totally counter-productive in that it didn’t help the homegrown players, and it lead to (it seems) this poultry tariff.
Something’s gotta give here, because right now the yuan issue seems to be zooming towards a boil, with the world’s central banks engaging in competitive devaluations, as they all try to boost their exports more than the others — ultimately a zero-sum game.
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