Seething
Aging quickly
Raging
Super Elites FTW
THE PACE QUICKENS
THE CHICKEN TAX
The history of the Chicken Tax, which includes a 25 percent tariff on trucks, is interesting enough to discuss here.
Following World War II, U.S. chicken farming established factory-like efficiency and mass-produced so much poultry that farmers began exporting excess supply, tanking global poultry prices. In trade speak, this is called dumping — something the U.S. has criticized China of doing with its steel oversupply.
France and West Germany retaliated with tariffs on U.S. chicken imports. President Lyndon Johnson, just in office following the assassination of John F. Kennedy, decided to up the stakes in a tit-for-tat move. In 1963, the U.S. implemented a 25 percent tariff on potato starch, dextrin, brandy and light trucks.
The move collapsed the U.S. truck business for Volkswagen and later Toyota. Toyota, of course, inevitably invested in U.S. operations, and the Japanese automaker now assembles its Tundra full-size pickup in San Antonio.
Of course domestic automakers have since continued to lobby to keep the Chicken Tax long after tariffs on U.S. poultry subsided.
A research expert told me the automakers are "terrified" the president, who has proven unpredictable for the industry, could give away the Chicken Tax in negotiations if they speak up too loudly.
The few executives willing to discuss tariffs believe their impact will be muted because the administration will wrap up trade negotiations quickly.