How the ‘Chicken Tax’ Makes Pickup Trucks More Expensive

The temporary commerce struggle between the U.S. and Europe within the early Nineteen Sixties might sound hardly price remembering—and it pales compared to the political and cultural upheaval that outlined that decade.

However any American who has purchased a pickup truck prior to now 50 years has been collateral harm in that battle—a battle that began as a result of European farmers have been mad about American exports of frozen rooster.

The 25 p.c retaliatory tariffs that President Lyndon B. Johnson set on imported gentle vans have fenced off the American pickup truck market from international opponents for many years. Because of the so-called rooster tax, shoppers pay greater costs, and a handful of manufacturers have turn out to be dominant within the market. The opposite tariffs that have been a part of that long-ago commerce struggle have been repealed. This one stays.

“There are a number of folks extremely invested in retaining it round and nobody actually cares to do away with it,” explains Jordan Golson, a contract automotive journalist. Relating to tariffs, he says, “It is not simple to make one in all these guidelines, but it surely’s a thousand occasions tougher to do away with one.”

On this week’s present, Golson additionally discusses the lengths that some international truck-makers have gone to so as to keep away from these tariffs. That features the story of the Subaru BRAT: a small pickup truck that was imported to America with seats put in within the truck mattress—so it could be labeled as a passenger car somewhat than a cargo car and, thus, exempt from the 25 p.c import tax.

Daniel Griswold, an adjunct scholar on the Cato Institute, reminds us that the rooster tax has brought on actual financial hurt along with these humorous, artistic makes an attempt at tariff dodging.

“The U.S. authorities is artificially constricting competitors in that market, and which means greater costs, it means much less selection,” Griswold says.

Vehicles will be imported to the U.S. with tariffs of simply 2.5 p.c, and the end result has been a much more sturdy marketplace for shoppers and larger international funding in making vehicles within the U.S.—one thing that hasn’t occurred within the truck market as a result of commerce obstacles.

The rooster tax has been “a dropping proposition throughout for People, shoppers, and the American financial system,” says Griswold. It is also an awesome instance of how tariffs can stifle, somewhat than shield, home markets.

Additional studying for this week’s episode:

“Low-cost American Rooster Gave Us This Bizarre Subaru Pickup,” by Golson, Wired

“Why Are Pickups So Costly? Blame the Rooster Tax,” by Griswold, Cato Institute

“How a Tax on Rooster Modified the Taking part in Discipline for U.S. Automakers,” by Sonari Glinton, NPR

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; truth checking by Katherine Sypher