Chicken Tax

Podcast Episode: 0228
Why Can't we get some trucks in the U.S.?

      What happens when a simple poultry product influences international trade and transforms an entire industry?  AutoLooks takes a look at why the U.S. and Canada are lacking pickup trucks and vans as we uncover what happened in the 60's to keep us from having these products.

      The story of the "chicken tax" might surprise you. This episode takes you on a historical tour from post-World War II Europe to the halls of political power in the United States, where chickens became an unlikely catalyst for economic conflict. President Lyndon B. Johnson's 1964 retaliatory tariff on light trucks in response to European tariffs on American chickens reshaped the automotive landscape, curtailing the influx of beloved European vehicles like the Volkswagen Type 2 van.

​      Unlock the secrets of a historic trade policy that continues to shape the automotive industry today. This episode unravels the captivating saga of the "chicken tax," a seemingly peculiar tariff that emerged from post-World War II economic tensions. Discover how President Lyndon B. Johnson's 25% tariff on light trucks, a response to European tariffs on U.S. chicken imports, created ripples that transformed the landscape for automakers both in America and abroad. From Volkswagen to Toyota, the chicken tax has left an indelible mark on the types of vehicles that populate the American roads.

       Join us as we peel back the layers of 1960s trade tensions, where political maneuvers at NATO meetings sparked a seismic shift in the automotive market. We'll examine the ripple effects of America's protests against European trade sanctions on U.S. poultry, which led to the implementation of the chicken tax. This tariff not only hindered foreign competition but also laid the groundwork for unexpected alliances between American and Japanese carmakers, steering the industry towards compact, fuel-efficient vehicles during economically challenging times.

​​​      This journey was set by the American government to protect their economy and retaliate against what was seen as unjust.  But in reality was the government setting their own economy up to fail in the long run?  Without enough competition, the American marketplace was eventually caught off guard without the products they required.  And when the gas crisis set in during the 1970's they were without products which a market demanded. But what could they do?

       American companies would eventually have to let the competition in, but only in a way which would benefit them.  Freeing up capacity at underutilized plants, the American auto industry found a way to work with companies who built the products they required for their market.  But when everything has to be made at home, how do you complete the task at hand, quickly and within reason?  This is where things to a trip down the grey road.

​       Our tale soon finds an alternate route as the market demands soon outweighed what could be done at home. Automakers would eventually go to extraordinary lengths to sidestep the chicken tax, and we're diving into their inventive strategies. Hear the ingenious tales of Subaru's Brat, Mercedes' knockdown kits, and Ford's Transit van shenanigans — each maneuver more creative than the last. We'll also wander into the global landscape of pickup truck availability, comparing the sparse presence of GM trucks to the global dominance of Toyota. Buckle up for a captivating exploration of the automotive world's resourcefulness and the enduring legacy of an unexpected economic policy.

Everett J.
​#autolooks