Washington may be pulled into the strife over deployment of a U.S. antimissile system in South Korea after a U.S. entity became the latest victim of Beijing’s retaliatory actions on Lotte Group and other Korean enterprises.

According to sources in China, authorities suspended the manufacturing facility of Lotte Shanghai Foods Corp. for one month on Tuesday, citing lack of fire safety system after conducting a safety check in the previous day. The entity is a joint-venture between Lotte Confectionary Co. and America’s Hershey Chocolate & Confectionery Corp.

It was Beijing’s first sanction on a Lotte Group’s manufacturing unit following a series of retaliatory actions against the Korea’s fifth largest conglomerate over its land swap deal with the Korean government for the installation of the U.S. missile shield system dubbed Terminal High Altitude Area Defense (THAAD). As of Tuesday, the number of Lotte Mart stores in China hit with business suspension reached 39, according to sources.

Lotte Shanghai Foods was jointly set up in 2007 by Hershey with a 51 percent stake and Lotte Confectionery with the other 49 percent. Two companies now each own equal 50 percent stake in the chocolate manufacturing firm whose annual sales amount to 80 billion won ($69 million). Majority of its products including Hershey’s Kisses and chocolate bars is sold in China, and the rest shipped to some countries in South East Asia. The company is managed by a Chinese leader appointed by Hershey.

“With China’s regulatory measures spreading to a company founded by an American firm, the U.S. can no longer sit around and watch the mounting frictions between Korea and China,” said a source in China. The production suspension on the Hershey-Lotte joint venture is likely to prompt Washington to intervene to prevent the situation from worsening.

Meanwhile, Seoul and Washington have begun deploying the missile defense system in Korea despite Beijing’s strong opposition. The Ministry of National Defense in Korea and U.S. Forces Korea (USFK) announced Tuesday that the first elements of the THAAD battery sent by the U.S. military arrived in Korea Monday night.

By Son Il-seon and Kim Yoo-tae

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