Global Vehicles and Thailand Argue Against 'Chicken Tax' On Imported PickupsHardly a day goes by in the mainstream press where the automotive industry isn't chided for producing large, fuel-thirsty trucks and other utility vehicles instead of focusing on efficiency and offering affordable yet still useful products to buyers who require more than what a car can offer. Rarely mentioned, however, is one of the biggest barriers towards this type of truck being introduced to the American market: the 'Chicken tax'.
There is no shortage of small, affordable and capable pickup trucks around the globe. In fact, this type of vehicle has been popular in Asian for decades, with a number of manufacturers seeing excellent sales of their mini-trucks. However, importing these pickups to the United States has been an economic impossibility thanks to a tariff instituted in 1963 that charges a 25% premium on any imported pickups, a move that was made in reaction to the tripling of taxes applied to chicken being imported from the U.S. to Europe. The primary target of the 'Chicken tax' was Volkswagen, but in the ensuing decades it has affected a wide range of manufacturers and largely squeezed smaller Asian truck companies out of the American pickup market.
There have been some creative ways to get around this tariff, ranging from Toyota and Nissan deciding the assemble some of their trucks in Mexico and the United States, to Chinese manufacturer Tiger Trucks designing their products in their homeland but contracting out their assembly to American corporations. Tiger Trucks specialize in small, efficient vehicles, but current regulations restrict their street legality to only a handful of states on roads with low speed limits.
Global Vehicles, an Indian pickup truck manufacturer, has recently put forth a significant lobbying effort to get the 45-year old law off the books. Global wants to be able to offer their Mahindra line of pickups in the U.S., and point to the small carbon footprint and low price of these vehicles as compelling reasons why the 'Chicken tax' should be abolished. Their efforts have been complemented by years of diplomatic maneuvering on the part of Thailand, which is host to many pickup truck assembly plants and which has been seeking an exemption from the 'Chicken tax' in order to broaden the prospective markets of the companies doing business in their country.
Although the reduction or elimination of this reactionary tariff would certainly impact the sales of domestic truck makers, it may also benefit them by allowing some of their foreign-assembled pickups to find a North American audience. It additionally gives consumers a much wider selection of trucks to choose from, particularly in the under-served mini-pickup market. Increased competition rarely results in anything other than lower prices, and with the sales of full-size trucks on the decline, an increase in low-cost, high-function offerings could be the lifeline that keeps many small businesses and automotive companies afloat.