Chicken Tax

What Is the Chicken Tax?

The Chicken Tax is a 25% tariff on light trucks imported to the U.S., forced in counter for European tariffs on American chicken imports. The tariff was forced in 1964 in an executive order issued by President Lyndon Johnson. In the years from that point forward, trade barriers have fallen and the average U.S. tariff rate on industrial imports remains at 2% actually 2019, as indicated by U.S. government figures. In any case, the Chicken Tax actually stands.

The original order slapped a 25% tariff on potato starch, dextrin, and cognac as well as light trucks. In the mediating many years, different products were stripped out yet the tariff on light truck imports stays right up to the present day. The Chicken Tax is otherwise called the Chicken Tariff.

Grasping the Chicken Tax

Industrial cultivating methods developed in the U.S. soon after World War II prompted an immense increase in the production of chicken, and production efficiencies prompted lower prices. When a treat saved for a Sunday family supper, chicken turned into a staple of the American eating regimen. Furthermore, there was a lot of surplus chicken for export to Europe. As per a 1962 article in Time magazine, chicken consumption rose 23% in West Germany in 1961.

A Farmers' Standoff

However, Europe was all the while attempting to recuperate from World War II, and farmers in Europe griped that American farmers were cornering the chicken market and driving neighborhood producers out of business. Toward the finish of 1961, France and Germany had set tariffs and price controls on birds from the U.S. By the beginning of 1962, U.S. businesses started griping they were losing sales. Toward the year's end, they estimated they had lost 25% of their sales due to European intervention in the chicken market. European and U.S. representatives attempted without progress through 1963 to agree on chicken.

About Cars and Chickens

In the interim, the American car industry was experiencing its very own trade crisis. Imports of Volkswagen cars flooded in the mid '60s as Americans embraced the Beetle and its cousin, the Type 2 van. The situation was desperate enough that U.S. automakers and the United Auto Workers (UAW) union brought the issue of German auto imports to the presidential bargaining table, as indicated by a 1997 New York Times article.

The Chicken Tax lastingly affects U.S. industry, for better and in negative ways.

President Johnson was attempting to convince Walter Reuther, leader of the United Auto Workers, not to call a strike just before the 1964 election. The president additionally wanted union support for his civil rights plan. He received what he wanted in return for remembering light trucks for the Chicken Tax. Volkswagen sales of trucks and vans in the U.S. plunged.

The Chicken Tax Today

Campaigning by the car industry has kept the tax alive such a long time. To that end American-made trucks actually overwhelm truck sales in the U.S. In spite of the fact that, it must be noticed that a large number of those small trucks are manufactured in Mexico or Canada, the two of which are exempt from the Chicken Tax under the North American Free Trade Act (NAFTA).

Features

• The supposed Chicken Tax is actually a tariff of 25% on light truck imports was originally forced in 1963 in counter for European tariffs on American chicken.
• The average U.S. tariff rate on industrial imports is currently 2%.
• The tariff is in effect right up 'til now.