The Chicken Tax: A Political Barrier to Imported Pickup Trucks in the US
If you’re an American who loves small pickups and utility vehicles, you may have noticed a frustrating trend. While these vehicles are widely available in many automotive markets around the world, they seem to be scarce in the US. So, what’s causing this disparity? One word: politics. The culprit behind the scarcity of imported trucks in the US is the infamous Chicken Tax.
Now, you might be wondering: what does a tax on chickens have to do with imported pickup trucks? Surprisingly, very little. The name “Chicken Tax” is a misnomer that originated from a retaliatory tariff imposed on light-duty trucks, among other goods. This tariff was enacted as a response to Europe’s taxation of American chicken exports. The connection to chickens is tenuous at best, but the consequences are real.
The Chicken Tax imposes a hefty 25% import tariff on light-duty trucks, making it financially challenging and unattractive for automakers to bring these vehicles into the US market. This high tariff has acted as a deterrent for overseas competition. Even Ford, a major player in the US market, recently settled a decade-long investigation over its importation of Transit Connect utility vans. Ford maintained that its practices complied with US regulations, but federal regulators disagreed.
While the tariff officially applies to light trucks, its impact extends to utility vans and pickup trucks. On the other hand, passenger vans and SUVs are exempt from the Chicken Tax but are still subject to a more reasonable 2.5% import tax. That’s why you see an abundance of imported crossovers and SUVs on American roads but fewer trucks and cargo vans.
Originally, overseas manufacturers found ways to circumvent the Chicken Tax by exporting “chassis cab” models to the US. These models would then have a bed attached to qualify as pickups. However, this loophole was eventually closed, leaving automakers with limited options to sidestep the tax. The Subaru Brat, for example, famously had two jump seats in the back to classify it as a “passenger” vehicle until the law was adjusted to include any vehicle with a bed, regardless of jump seats.
In theory, the manufacturer bears the cost of the Chicken Tax, which is then incorporated into the vehicle’s sticker price. However, in practice, few manufacturers are subject to this tax today because most trucks and cargo vehicles sold in the US are locally built. The exceptions are smaller boutique builders whose customers may not appreciate the additional costs but can likely afford them.
In conclusion, the Chicken Tax remains a significant barrier to the importation of small trucks and utility vehicles into the US market. Its origin story may be quirky, but its impact on the automotive industry is undeniable. As long as this tax persists, American consumers will continue to miss out on a wide range of small pickups and utility vehicles enjoyed by enthusiasts in other countries.