Chicken tax

[3] Eventually, the tariffs on potato starch, dextrin, and brandy were lifted,[4] but since 1964 this form of protectionism has remained in place to give US domestic automakers an advantage over imported competitors.

For example, Ford, which was one of the main beneficiaries of the tax, also evaded it by manufacturing first-generation Transit Connect light trucks for the US market in Turkey; these Transits were fitted-out as passenger vehicles, which allowed Ford to evade the Chicken Tax when the vehicles passed customs in the US.

[1] Similarly, to import cargo vans built in Germany, Mercedes disassembled fully-completed vehicles and shipped the components to "a small kit assembly building" in South Carolina, where they were reassembled.

[12] France introduced the higher tariff first, persuading West Germany to join them—even while the French hoped to win a larger share of the profitable German chicken market after excluding U.S.

Konrad Adenauer, then Chancellor of Germany, later reported that President John F. Kennedy and he had a great deal of correspondence over a period of two years, about Berlin, Laos, the Bay of Pigs Invasion, "and I guess that about half of it has been about chickens.

"[3][12] Diplomacy failed after 18 months,[4][14] and on December 4, 1963, President Johnson imposed a 25% tax (almost 10 times the average U.S. tariff) by executive order (Proclamation 3564)[15] on potato starch, dextrin, brandy, and light trucks, effective from 7 January 1964.

[16] In retrospect, audio tapes from the Johnson White House revealed a quid pro quo unrelated to chicken.

[16] The Chicken Tax directly curtailed importation of German-built Volkswagen Type 2s in configurations that qualified them as light trucks, that is, commercial vans and pickups.

As a direct result of the Chicken Tax, Japanese automakers Toyota (with its Publica, Crown, and Corona coupe utes), Datsun (Sunny truck), Isuzu (Wasp), and Mazda (Familia), which were selling pickup trucks, coupe utility vehicles, and panel deliveries in the US at the time, pulled these models out of the North American and Caribbean markets and did not bring over many models sold elsewhere.

[18] Robert Z. Lawrence, professor of international trade and investment at Harvard University, contends the tax crippled the U.S. automobile industry by insulating it from real competition in light trucks for 40 years.

[4] From 1978 to 1987, the Subaru BRAT carried two rear-facing seats (with seatbelts and carpeting) in its rear bed to meet classification as a "passenger vehicle" and not a light truck.

[1] The vehicles are exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrive in Baltimore, and are converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts.

Ford sued and finally, in 2020, the Supreme Court declined to hear the case which confirmed the position of CBP.

[23] In 2024, Ford reached a settlement with the United States Department of Justice, agreeing to pay $365 million in tarriffs and penalties.