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How a Chicken Tax Affected Light Truck Production

If you notice that the options for buying that light truck are severely limited, it has a lot to do with chickens, Europe, Lyndon B. Johnson, and taxation. During the early 1960s when Lyndon Johnson was the President of the United States, there was a topic that was much more significant an issue than the Red Scare -- it was poultry and taxation.

And as noted in a 2013 article by the Washington Post concerning Lyndon Johnson's "chicken tax" and light trucks, in the early part of the 1960s, "the U.S. was farming chicken on a massive scale and sending it to Europe, where chicken was far rarer and more expensive. The glut of U.S. chicken drove down prices in Europe, edging local farmers out of the market" (Read). Because of this price drop in chicken prices that was detrimental to chicken farmers located in Europe, Europe decided to ban or enact huge tariffs on imported chicken brought into Europe by the U.S.

Because of this fallout, specific European products began to be targeted by the U.S. like "the light pickup truck -- specifically, trucks from Volkswagen. The so-called 'chicken tax' was instituted by president Lyndon Johnson and imposed a 25% tax on trucks and commercial vans imported to the U.S" (Read, 2013).

As a result, Johnson's tax "insulated U.S. truck manufacturers from competition for five long decades. That's kept prices high and created huge profit centers at Chrysler, Ford, and General Motors" (Read, 2013).  However, there was a downside to the tax levied on some European imports to the U.S. based on the argument that Chrysler, GM, and Ford were not "developing innovative cars because they've become addicted to the easy money offered by pickups" (Read, 2013).

Moving ahead five decades, and there have been thoughts about the U.S. repealing Johnson's "chicken tax" based on a Trans-Pacific Partnership. How this would affect American truck manufacturers like Ford, General Motors, and Chrysler is worth noting if you are in the truck business. If and when foreign light pickup trucks begin to be manufactured in Europe for import to the U.S based on the repeal of Lyndon Johnson's tax is anyone's guess.  There are a lot of questions not yet answered when it comes to the future of foreign imports of light pickup trucks in the U.S. The "big three" American vehicle manufacturers will most certainly be paying close attention should any new legislation be enacted concerning the manufacturing and importing of these trucks to the U.S.

With four decades of business experience, J. Ruble and Sons know a lot about trucks -- especially high quality nicely refurbished daycab tractors, and other vocational trucks that they sell to small business and large, corporate enterprises. Please contact them to learn more about how they can help you with your trucking needs.

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