In a clear sign that China is getting increasingly bold in its response to an ongoing trade dispute with the U.S., Chinese authorities Friday slapped preliminary import duties of as much as 105.4% on U.S. chicken products.

The Ministry of Commerce which announced the decision said U.S dumping is hurting China’s domestic poultry industry. Once the new directive takes effect Feb. 13, U.S. exporters, including Pilgrim’s Pride Corp. and Tyson Foods Inc., will be required to deposit the duty with Chinese customs, pending a final decision on the matter.

These comments come from a Wall Street Journal article. This is more a trade issue rather than a tax issue, but in the week before Chinese new year I thought it was some welcome light relief. This is apparently part of the ongoing broader trade dispute between China and the US with the primary issue being the current valuation of the Chinese Yuan. I wont go into that issue has it has been discussed to death by people that have a stronger understanding of monetary policy than I do.

However, a question that must be asked is how this relates to the recent “strong stance” taken by the US against China on a number of issues – sale of weapons to Taiwan etc. View to China covers these issues well in a recent blog entry. This seems to be further vindication of the view that much of the recent argy bargy between China and the US is purely domestic political point scoring rather than legitimate policy making.