Quick, what do potato starch, dextrin, brandy, and a smallish pickup truck have in common? The makings of an amazing weekend in Vegas? The contents of Godzilla's stomach after a really weird bender? Close. Those are the things slapped with a 25% tariff known as the Chicken Tax, and it's killing innovation in the truck market.
Everything about the Chicken Tax is weird. You may notice that the list of items the tariff includes is suspiciously free of chicken for something known as the "chicken tax." That's because the tariff is in retaliation to other countries (France and Germany, mostly) that put a tax on American chicken. In 1963.
I'll explain. See, after WWII, the US found that we'd become really good at factory farming, and as such could really crank out some chickens, at rates never before known. Around this time, chicken was a rare delicacy in Europe, which is hard for my chicken-saturated American brain to comprehend, but that's how it was.
Once cheap American chickens came on the market, everything changed. Chicken prices plummeted, and European chicken-gorging reached new heights. This started rounds of accusations — the Dutch claiming chickens were being dumped on the market below cost, the West Germans going all the way and suggesting American chickens were artificially plumped with arsenic (some sort of were), it was a mess.
Eventually, it all ended with a bunch of import restrictions on American chickens into Europe, causing a 25% loss of business for US chicken exporters. This pissed off the US so much that a senator from Arkansas once even interrupted a NATO conference about nuclear armament to complain about chickens. We were pissed.
So pissed that, in 1963, the tariff on potato starch, brandy, dextrose, and light trucks was added. I can't speak for the first three (maybe check Gawker's dextrose-and-sugars-related blog, Sweetly, for that) but the light trucks thing was a direct 'fuck you' to West Germany via Volkswagen.
The tariff added a 25% tax to the price of the trucks, meaning that the VW Type II pickups, double-cabs, and cargo vans that had started to become popular in the US were now all but priced out of the market. The Microbuses with seats and windows were classified as passenger cars, and as such weren't affected, but for any foreign truck maker, this was the end.
And that's how it's been ever since. Sure, there's loopholes that get exploited. The Subaru B.R.A.T. famously included a pair of daredevil seats in the truck bed to get around the tax, and for a brief while in the 1970s and 1980s there was a loophole for trucks that came as cab-and-chassis, with no bed, which is what allowed all those little Datsun and Mazda trucks to briefly flower. The loophole was eventually closed, and all those great little trucks went away.
The Chicken Tax just doesn't make sense anymore, and it's doing more harm than good. For example, Ford, one of the companies the Chicken Tax did the most to protect, is a much more global company today. That means this American company sometimes builds trucks overseas and brings them back into the US, as they do with their Transit Connect van, which is built in Turkey. To get around the Chicken Tax, it comes to the US with seats and windows, both of which are removed upon entry. It's wasteful and crazy.
Even worse, the Chicken Tax has caused the US truck market to stagnate without competition. The US builds some terrific full-sized trucks, but you're out of luck if you want anything smaller. And even those full-sized trucks are getting to be pretty damn overpriced.
Remember that map we did of the best-selling cars by state in the US? It was a huge Ford F-150 sandwich. The truck market in the US is huge, and it is dominated by at best a few key models. There's some token foreign competition, sure, and companies like Toyota and Honda get around the tax by building factories in the US, which is great, but they're nowhere close to unseating King F-150 the Large.
The US truck market needs more variety, more competition, more innovation. Ford's Atlas concept proved this— more of the same, but bigger, fancier, more expensive. There's so many parts of the US truck market that don't want or need that, and what they do need just isn't available in the US.
I ask every manufacturer I meet why they don't have a good small truck. The foreign ones usually do, just not sold in the US, and the reason they're not sold here is still because of a 50-year-old dispute over chicken that doesn't even matter anymore. If you want a new truck and you live in a reasonably urban area, your choices are abysmally slim for anything you'd feel comfortable riving and parking on a daily basis. Same goes if you want a gas-saving little delivery van (MINI recently tried it with the Clubman van, and abandoned it thanks to the Chicken Tax).
The stifling of innovation becomes more apparent if you look at what American companies were producing right before the Chicken Tax, when they had to approach foreign trucks with innovation. Take Chevy, for example.
Chevy's early '60s truck lineup is pretty terrific. You've got full-size pickups (Apaches), heavy-duty trucks (vikings), smaller, ice-cream-style delivery vans, and, the most direct response to competition, the Corvair-based rear-engine vans and pickups.
These were created in direct response to VW's Type IIs, and they were truly innovative. They borrowed the VW's flat engine air-cooled layout, but added more size and power and even included such innovative features as the side-loading Stepside pickup truck. These were real reactions to competition, and showed that American companies could have competed, if they'd been allowed to.
But that's not how it ended up. American trucks have been walled-off from an incredible amount of competition since the 1960s, and it's time for that to end. We've seen how well American cars have come back lately, with cars like, say, the Focus showing that the US can compete in traditionally European and Japanese-dominated areas like small hatchbacks. It's time to do the same thing with trucks.
Enough with the Chicken Tax. I'm not the only one who thinks this. American truck companies should be plenty confident at this point to do this. In fact, I'd put this in terms of a challenge to American truck companies: show us what you got.
No more hiding behind the "there's no demand" for small trucks in the US bullshit. The proliferation of them through the '80s loopholes should show that's not true, and there's still plenty being nursed around today in cities like Los Angeles. There's plenty of people who would love to have a smaller truck or van.
So, happy 50th birthday, Chicken Tax! Don't let the door smack your cloaca on the way out.