China retaliates on US food processing companies – start of new trade war? What is the effect on the dollar, economy, stocks, and bonds?
Paula Ranske
Jul. 14, 2007

In recent days Chinese food has been caught red handed unworthy for human and pets consumption. Case after case has shown that Chinese manufactured food items are not worth consuming in US.

China today retaliated. According to media reports, China has suspended imports of from Tyson Foods Inc. and several other U.S. meat processors, in an apparent attempt to turn the tables on U.S. complaints about tainted products from China.

China's General Administration of Quality Supervision, Inspection and Quarantine late Friday said frozen poultry from Springdale, Ark.-based Tyson Foods, the world's largest meat processor, was contaminated with salmonella.

Frozen chicken feet from Laurel, Miss.-based Sanderson Farms Inc., were tainted with residue of an anti-parasite drug, and frozen pork ribs from Wichita, Kan.-based Cargill Meat Solutions Corp. contained the leanness-enhancing feed additive ractopamine, the agency said.

This can be the start of the trade war that normally accompanies severe worldwide bear markets in stocks.

The effect on the dollar can be actually positive. The stock market will dislike any trade war. The bond market will love it. The biggest gainers will be US jobs.

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