have you ever wondered why if you want to buy a truck in the united states you have drastically
fewer selections than many other countries tend to enjoy and why us-made trucks dominate
the market in the country while the same ratios aren't seen at all with other cars
well it's all because of chickens and we're not joking before the 20th century chicken wasn't
nearly as common of an item on people's dinner plates as today and was very much a luxury item
mostly restricted to the wealthy in europe in fact chickens were actually originally domesticated for
cockfighting not food improvements in food storage via refrigeration refinements in chicken breeding
and the development of the so-called factory chicken helped change chicken consumption in
the united states and then the world so what does this have to do with the truck market
in the united states you might be wondering while the u.s began producing so much chicken
that businesses started exporting it to europe in massive quantities by the early 1960s peaking
with the united states owning half the chicken import market in europe european farmers simply
couldn't keep up with a much lower prices of imported american poultry for instance
in west germany only 1.1 percent of imported chicken came from the united states in 1956
just six years later despite the cost and effort of shipping the chickens all the way from america
american poultry made up nearly a quarter of all west german chicken imports and was sold for much
less than the local varieties accusations against the american poultry industry soon began to
fly with claims from the dutch that the american chickens were being purposefully priced below cost
to drive the dutch poultry farmers out of business the west germans accused the american chicken
farmers of using arsenic to cause the chickens to gain extra weight while the french poultry farmers
claimed that eating american chicken would have a negative effect on one's virility in the response
to the united states is paltry rapidly taking over the market in many european countries the european
economic community eec in 1962 instituted a tariff on imported chicken officially the goal of the eec
was to help the european economy continued to recover from world war ii the tariff drastically
raised the price of imported u.s poultry and some countries even banned u.s chicken altogether
the u.s government spent 18 months trying to negotiate a repeal of the tariff and bans but
with no success the then chancellor of germany conrad adenauer even later reported that despite
the cold war threatening to get very hot about half of his many conversations with the kennedys
were about chickens senator j william fulbright of arkansas even once interrupted a nato meeting on
nuclear armament to threaten to remove u.s troops from nato if the chicken sanctions weren't removed
the whole thing waged between allies in the cold war ultimately became dubbed the chicken war after
diplomacy failed in retaliation president lyndon b johnson signed the so-called chicken tax into law
on december 4th 1963. not at all directly about chickens it targeted potato starch brandy dextrin
and light trucks and it forced companies importing those items to the united states to pay a whopping
25 tax on said imports each of the four products taxed under the chicken tax were strategically
targeted for instance the reason for choosing to include light trucks had to do with a specific
manufacturer volkswagen the volkswagen mans were immensely popular in the united states during
the early 1960s and the us government claimed the import cost of those from west germany was
about equal to the loss of revenue for the poultry industry not being able to export chicken to west
germany practically overnight the once popular vw van which fell under the classification of light
truck disappeared from car dealerships around the united states as consumers weren't willing
to pay the increased prices directly resulting from the 25 tariff of course there were other
industries that johnson could have picked to balance things out as to why specifically the
light truck industry was won selection there was a political benefit to him at home recordings from
his time in the white house later revealed an arrangement between johnson and walter
roostner the president of united auto workers in exchange for johnson targeting volkswagen
ruther agreed not to call a strike of auto workers ahead of the 1964 presidential election
and agreed to support johnson's work in civil rights however it should also be noted that the
chicken tax was not so specifically worded to be levied just against european manufacturers but
against any automaker who imports light trucks into the united states while most manufacturers
chose simply not to sell their trucks in the u.s anymore or decided to build plants in the u.s to
produce at least some of their light truck lines like honda and toyota others discovered clever
loopholes to import their trucks and cargo vans without paying the exorbitant tax for instance
certain japanese companies started exporting pickup trucks without the bed or box attached
to the us rather than the fully assembled pickup truck this ultimately made them subject to only
a four percent tax and the manufacturer simply attached the bed or box once the truck arrived
in the u.s however this loophole was removed in 1980 at the request of u.s automakers and unions
making these imports also subject to the 25 tax another loophole truck manufacturers still take
advantage of is the difference between a passenger vehicle and a truck what of course is designed to
hold passengers and the other is designed to haul cargo but the passenger vehicle is only
subject to a 2.5 tax so for instance as recently as 2012 ford ironically enough an american company
this tariff normally helps built its transit connect vans in turkey and outfitted them with
seats glass windows and seat belts in the back they were then shipped to the united states and
passed through customs as passenger vehicles the vans then went to a warehouse where local
contractors removed the seats and windows from the back replacing them with a floor piece and
steel respectively to transform the transit connect into a commercial van for hauling cargo
this loophole was also closed up when u.s customs ultimately forced the company to start paying the
25 tax on these vehicles as of march 2013. board lobbyists then began pushing for removing the tax
for american-based companies even on their imports but keeping it for everyone else then there's the
mercedes-benz sprinter van which goes a different route before arriving in the u.s while passenger
versions of the van are immune to the chicken tax the cargo versions cannot normally be imported to
the united states without the tax so mercedes-benz ships the cargo version in a sort of kit form
only partially built making sure to leave the kit incomplete enough so that when it's assembled in
the u.s just enough parts are purchased and added in america to not have the authorities getting too
upset about it the process costs mercedes-benz quite a bit resulting in an increase in the
cost of the van of about nine percent but of course nine percent is better than 25 percent
in the years since the chicken tax was made into law the taxes on three of the four items have been
repealed but as you might have guessed from those relatively recent examples the tax on light trucks
remains proponents claim the tax help protects american companies and keeps jobs in america
opponents note that before the chick attacks the big three american automakers featured numerous
types of light trucks and cargo vans in their product lines but since then the chicken tax has
insulated u.s truck manufacturers from competition for five long decades and that's kept prices high
and created huge profit centers at chrysler ford general motors so much so that the big three have
slacked off in developing innovative cars it's also been suggested that not only would u.s
consumers get a great variety of trucks to pick from if the tariff was removed but the prices
would also likely fall with increased competition bringing profit margins on trucks and cargo vans
more in line with car sale profit margins for u.s automakers providing a net benefit for u.s
consumers so whatever side of the argument one's on it is at least a fascinating piece of history
that is still unfolding today so i really hope you found this video interesting if you did
please do hit that thumbs up button below don't forget to subscribe and thank you for watching