It’s been 50 long years, but the U.S. may finally drop its “chicken tax” tariff so automakers building trucks abroad can import them to the States without facing heavy fines.
Enacted in 1963 as a retaliation to France and West Germany’s tax on U.S. chickens exported, a 25-percent tax was added to trucks brought into the U.S. from outside markets. As a result, some automakers have stopped selling trucks in the U.S. like Volkswagen. Some keep models out of the country, like Ford and Toyota with the Ranger and Hilux, respectively. Some have tried to enter the market with vehicles like the Mini Clubvan–and failed. And then there have just been oddballs like Subaru, which tacked two flimsy plastic chairs into a truck bed in the 1970s to get its Brat reclassified as a passenger car.
Now, there’s talk to lift the chicken tax as the U.S. leverages for a more open market with Japan, which has been notoriously hyper-protective to vehicles from outside the Land of the Rising Sun. U.S. legislators see the “chicken tax” lift as a way to ground truck prices, which have soared at more than twice the rate of passenger cars since 2005. That, of course, doesn’t account for the difference in inflation of prices versus increased content like what you might see in a Ram 1500 Laramie Longhorn or a Ford F-150 King Ranch edition, which are both opulently lined to the gills with amenities.
Because of the recent free trade agreement signed with South Korea, the tariff will be gone between the U.S. and its partner by 2021, which might allow Hyundai to consider producing a U.S.-style pickup. On the other hand, the U.S. market is incredibly brand-loyal with as many as 75 percent of shoppers claiming to stand by their trucks through thick and thin.
So it may not matter if Toyota or Ford can import a truck made in Japan, Spain, or Turkey in the future. Consumers might not care as long as they can still get the vehicles that have served them well for decades without any hassle.
Source: Detroit News