The Chicken Tax was instituted back in 1963, and was aimed at European (read VW) truckmakers. The long and the short of it is that there was a trade war going back then between the USA and Europe. The Europeans tripled the tax of chickens being imported into Europe, and the US retaliated by putting a 25% tax on any truck imported into the USA. That's how it came about, and we've lived with it ever since...
So now there is an effort afoot by the Bush administration for a free-trade agreement with Thailand that would substantially reduce this tariff, if not eliminate it. The UAW and Detroit automakers are fighting this tooth-and-nail not to let this happen. They fear that if the Chicken Tax is reduced or repealed, the US will be flooded with cheap pickups made in Thailand, and that their "truck cash cow" will disappear.
My feeling is that I would like to see a lot more diversity in the types of trucks offered for sale here, like small compact diesel trucks, and many of the other types of trucks we see sold in other markets, but can't be sold here at a profit, because of the 25% tariff. Eliminating the Chicken tax would allow that to happen. Imported cars have a 2.5% tax. I think for imported trucks it should be the same.
What's your take? Are you for or against continuing the Chicken Tax?
mikesright says:
08:28 AM, 02/24/06
I like diversity as much as you, but one thing is for certain. We need FAIR trade and not FREE trade. The last thing we need is another country selling even cheaper cars here because they have extremely low wages/weak currency. This is not protectionism, it would be giving our automakers a level playing field, and should be used with all other countries, it just makes sense. Bring these autos over here. If the chicken tax is too high, make it fair for those guys to compete. Just don't sign our automakers ANOTHER death warrant by signing a free-trade agreement. Oh well, I guess Bush will be stuh-stuh-stuh stupid again, though and sign it.
bill84 says:
10:19 AM, 02/24/06
Diversity in the American marketplace is fine for the American consumer. And American markets are the freest markets in the world. What about the rest of the world ? They don't buy nearly the products or services that we buy from them. There certainly is FREE trade. But FAIR trade, not a chance.
If anyone wants proof, check out the Current Account Deficit. We buy way too much from the rest of the world to the detriment of our own manufacturers.
Where are the PATRIOTS ??? I wouldn't buy a foreign car name plate. I buy American. Period. Because of the Globalists, many parts in my American car are made somewhere else. Sadly, because of the Globalists, American car companies have located factories in Mexico.
Foreign car companies have located factories in the US because they don't have the overhead that American companies do. No unions to deal with, no pensions, few benefits and lots of tax breaks.
I don't want to see Chinese cars sold here and I don't want any Thai made trucks.
mirth says:
10:49 AM, 02/24/06
On the face of it, a 25% tax on imported pickups is stupid and arbitrary...
...BUT, so are most of the tarrifs and obstructions that American products face in both Asia and Europe. So I guess my answer is: we can drop the Chicken Tax as soon as these other countries drop their stupid taxes (real or implied). Free trade should be a two way street, not a "thank you sir may I have another" scenario.
rsholland says:
11:35 AM, 02/24/06
Bill, globalization is not going to stop, regardless of how you may feel about it. It's a fact of life, and will continue.
tirthankar_b says:
03:32 PM, 02/26/06
I am an outsider (from India) presently in US. US is ignoring its manufacturing industry way too much. Even service industry is being outsourced.
As someone pointed out, it should be fair trade not free trade.
moparbad says:
10:13 PM, 03/ 8/06
Ford manufactures pickups in Thailand. GM manufactures pickups in Thailand. Eliminate the chicken tax and both Ford and GM could compete on equal ground with Toyota and Nissan.
Keep the tariff and keep North American jobs at Toyota and Nissan plants while pushing GM and Ford further toward extinction.
GM and Ford's survival will depend upon globalization, not protectionism.
windex says:
09:02 AM, 09/ 4/06
Ok, so many asian countries have lax labor laws and can produce products way cheaper than can US automakers.
On the other side of the coin is the fact that US automakers are uncompetetive due to high wages and huge pension burdens.
The Chicken tax was conceived back in the 1960's at a time when economic realities were far different than they are now.
The concept that an unskilled worker with a highschool education should get a lifetime high paying jobs with a comprehensive pension and benefits was also conceived around the same time, again when economic realities were far different (IE The big three were at the top of the foodchain wih no competition in sight.
North American Unions need to rethink their demands, lest the resulting uncompetetive distorted labor costs drive the big three into oblivion.
High labor costs, defined benefit pensions and huge healthcare burdens (read Union demands) are going to kill the big three, not inexpensive diesel pickups...
rockylee says:
06:44 AM, 04/10/07
I'm for the chicken tax because they tax our exports and lets not forget to mention this only fight's off some of the currency manipulation issues.
-Rocky
octopushead says:
05:14 AM, 06/ 9/07
A free trade agreement with Thailand would be disastrous.It would only lead to more exploitations of low wage asian workers and more manufacturing jobs losses. But from they way I'm interpreting it seems as though the tax would apply to importing finished vehicles. Right now and I may be wrong a company like Ford, which owns 33% of Mazda and produces diesel engines in Japan could import the engines to U.S. and assemble the vehicles in north american factories. Thus avoiding the tax all together?Anyone with more info?
pkiley says:
10:27 AM, 11/16/07
is there a chicken tax on suvs coming from India currently in place. Who does that get paid to Customs? from the exporter or the Importer
rick138 says:
11:13 AM, 04/11/09
i think the chicken tax should stay in place,by keeping the chicken tax in place it will create jobs in america or keep revenue flowing.mahindra was going to assemble trucks in the usa to get out of paying the tax now they are lobbying congress to end the tax so they can put more profit in thier pockets,if mahindra was going to make money assembling the trucks in the usa .than how big of a profit will they make on the cheap labor they have in india
rick138 says:
11:14 AM, 04/11/09
i think the chicken tax should stay in place,by keeping the chicken tax in place it will create jobs in america or keep revenue flowing.mahindra was going to assemble trucks in the usa to get out of paying the tax now they are lobbying congress to end the tax so they can put more profit in thier pockets,if mahindra was going to make money assembling the trucks in the usa .than how big of a profit will they make on the cheap labor they have in india
ralphfla says:
05:02 AM, 08/ 6/10
Okay I agree with the reason for the tax. I believe we should amend it. I am sick and tired of the rest of the world getting to have these cool vehicles, but not us! Ford and GM have an array of vehicles overseas that we do not have here. They should make a flat and level tax on all imports. Wether they are parts going to an assembly line at the Toyota or Hyundai plant or the entire vehicle. They could then give those companies that choose to manufacture vehicles in the 50 states a tax break or incentive to do so on their bottom line instead of each piece. The fact that Ford imports vehicles from Turkey then rips components out of the vehicle and throws them away. The Transit Connect is one of the vehicles they do this to. They import it as a minivan and then convert it to a cargo van. This is silly. What about going to a Mitsubishi dealership and buying a Dodge. Or going to an Izuzu dealership to buy a Chevy. Right now these companies can import pieces of cars in boxes and pay only 2 - 4 % tax or pay 25% tax on a finished vehicle. They should pay more like 9 or 10 % on a finished vehicle. They should impliment this for all imports, not just trucks. This will influence the price enough for the vehicle to keep the numbers imported low but allow the plublic to have access to them if they are willing to pay the extra bucks. Come on, who wants to go to a VW dealership to buy a Chrysler Van. The big Three are Global companies. China imports the Lincoln Navigator and the Jeep Grand Cherokee. GM sells more cars there than they do here. It works both ways.