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Why We Can't Have Nice Things

Why We Can't Have Nice Things: The 'Chicken Tax' That Makes Pickup Trucks More Expensive

Aug 31, 2023
The podcast explores the history and impact of the 'Chicken Tax', a 25% tariff on imported light trucks. It discusses how the tariff has limited competition, increased prices for consumers, and led to attempts at tax evasion. The podcast also examines the challenges of removing the 'Chicken Tax' and the unintended consequences of trade wars.
24:24

Podcast summary created with Snipd AI

Quick takeaways

  • The chicken tax, a 25% tariff on light trucks, has distorted the American pickup truck market, limiting competition and raising prices for consumers.
  • Tariff engineering, demonstrated by vehicles like the Subaru Brat and Ford Transit Connect, allows companies to avoid paying import taxes and navigate the complexities of the chicken tax.

Deep dives

The Chicken Tax and Its Impact on Pickup Trucks

The podcast episode explores the history and impact of the chicken tax, a 25% tariff imposed on light trucks, which has shaped the American pickup truck market for the past 60 years. The chicken tax originated as a response to European tariffs on American chickens exported to Europe in the late 1950s and early 1960s. The retaliation by the US, targeting brandy, potato starch, and light trucks, created unintended consequences, including distorting the market for pickup trucks, limiting competition, and raising prices for consumers. The tax applies not only to imports from Europe but also to trucks from all over the world. Domestic producers of trucks also benefit from the lack of competition, leading to higher prices. The chicken tax has prevented foreign manufacturers from entering the US pickup truck market and has limited consumer choices. The automotive industry's experience with lower tariffs on imported cars demonstrates the benefits of increased competition and investment. The episode highlights the need to reevaluate and remove the chicken tax to create a more free, fair, and competitive market for pickup trucks.

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