The Foul Chicken Tax

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The chicken tax affects much more than chickens. Image from Wikimedia Commons/DFW

The chicken tax affects much more than chickens. Image from Wikimedia Commons/DFW

Occasionally, one might happen across mention of something called the “Chicken Tax” and how it prevents people from being able to buy light pickups. It’s an import tax, deviously applied to the automotive industry, which has yielded some interesting ways of avoiding it.

Hey, Hey, LBJ, How Much Chicken Tax You Pay?

A large reason why there aren’t many light pickups on offer in the United States is an import tariff called the “Chicken Tax.” The Chicken Tax – which is actually an executive order, titled Proclamation 3564 – levied by Lyndon Johnson in 1964. Johnson, known for being vindictive (ask the Vietnamese), decided he wanted to give the Europeans the finger and placed a 25 percent tax on potato starch, dextrin, brandy, light trucks and chicken.

At the time, various European nations were carping that cheap American chicken was flooding the market, and their overpriced rustic commune-raised chicken sales were plummeting. LBJ wanted to ensure that American chicken stayed cheap and those kraut punks over at VW got their eyes blackened by not being able to sell too many vans.

Personal fowl

In any case, the chicken tax didn’t keep people from buying vans. What the law DID do was spur creativity on the part of automakers on how to get around it. They came up with some interesting strategies.

The original tenets of the law established a minimum threshold of “construction,” meaning if a certain portion of assembly was finished in the U.S., it wasn’t “imported.” Thus, light pickups made by Mazda, Mitsubishi, Toyota and Nissan got shipped from Japan with the pickup bed off the frame. The beds would get welded on in the U.S., and then they’d hit the lot. Small trucks made by Japanese makers for domestic car companies (such as the Mazda-derived Ford Courier and Toyota-derived Chevrolet LUV) got similar treatments.

Subaru devised a novel approach when it came to the BRAT. They simply bolted two seats in the bed, added carpets, seat belts, “oh s***” handles and called it a car.

However, if there’s one thing the Feds hate, it’s a smart ass, so they closed the loopholes allowing those cars to evade the tax, killing those vehicles and impeding competition in the truck market. To date, the only light pickups offered are those built domestically or in NAFTA countries, which are exempt from the tax.

Winging it

Modern automakers have their ways of evading the chicken tax, and the Feds are pissed about it. Ford was building Transit Connect vans in Turkey, with seats in the back – making them passenger vehicles. When shipped stateside, Ford stripped them out and put them on sale as cargo vehicles. Daimler did the same thing with Mercedes-Benz Sprinter vans, but both got shut down by the fuzz.

In the meantime, options for utilitarian vehicles which aren’t aimed squarely at soccer moms are relatively few. Nothing wrong with soccer moms, of course, but some people would like a compact truck, or a modern El Camino. (GM already makes it. It’s called the Holden Ute.) It would be nice to have car-like fuel economy with truck utility; even current “light” trucks are incapable of 20 mpg.

Sources

Wired

PickupTrucks

AutoNews


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