For decades, the American truck has been untouchable—as much a quirk of international tax law as anything the automakers did right. In 1962, frustrated by a glut of U.S. poultry, the European Economic Community began taxing chicken imports.
The U.S., in turn, levied a 25 percent tariff on a wide range of European imports, including potato starch, brandy, and—you guessed it—light trucks. The “chicken tax,” as it’s called, persists to this day, and it has kept foreign car companies largely out of the truck market.
The economic disadvantage is significant. A company such as Kia or BMW would have to charge $56,000 for a truck in order to make $42,000 (the average sticker price on a Ford F-150 last month). That’s a $14,000 handicap before anyone even kicks the tires.
Rather than fight this uphill battle, foreign carmakers have focused on expanding their product lines into every other available segment, from tiny compacts to slick sports cars. Mercedes added its sixth different kind of SUV this week, bringing its family tree to 17 branches—and it still doesn’t make a pickup.
John Krafcik, president of the digital car-shopping platform TrueCar, argues that there would be more, better pickups without the tariff. “Most of the U.S. car segments have 20 brands competing for your dollars,” he says. “If there wasn’t the chicken tax, you’d see so much more innovation. You’d see every brand rushing in and you’d see a vast increase in choice.”
• Some companies have tried to dodge the rules with design. The 1978 Subaru BRAT was a small car with a tiny truck bed that had carpeting and two plastic seats to appease U.S. trade officials but no one else. Subaru did not stamp “Bad Idea” on the side of the vehicle, but it might as well have.
• Other Japanese brands have established North American plants to get around the tax. Toyota’s Tacoma and Tundra models are made in San Antonio and Tijuana, Mexico. Nissan, builds its Frontier and Titan models in central Mississippi.
• The Japanese brands sell less than one pickup for every four American models sold. Toyota has had the most success, capturing 12 percent of the U.S. pickup market mostly with small trucks, a market Ford and General Motors have long neglected.
• Think tanks such as the libertarian Cato Institute have been calling for the repeal of the chicken tax for more than a decade, to no avail.
The truck market is about to get more interesting. At the North American International Auto Show this week, Toyota unveiled a new Tacoma that will compete with the Chevrolet Colorado and
“I don’t remember a time when all the trucks have been redone as close together,” Michelle Krebs, an analyst for AutoTrader.com, told Bloomberg. “It’s true across the whole industry, and it’s spreading to the truck business: New is not what it used to be. The bloom is off the rose a lot sooner.”
