The Chicken Tax: How A 1960s Trade War Tariff Still Affects Your Truck Today

Big pickups are big business in the U.S., and there are few better examples than the Ford F-150. Ford's ubiquitous pickup has sat at the top of the U.S. automotive charts for the better part of the last four decades, only barely losing top place in 2024 to Toyota's RAV4 crossover. 

However, the F-150 is just the tip of a very big iceberg dominating U.S. sales charts: SUVs and trucks have historically made up the vast majority of vehicles sold in the U.S. in the past few years, peaking at over 80% at the end of 2021. The balance has shifted slightly in the years since, but only just: Jato Dynamics estimated that 75% of all vehicles sold in the U.S. in 2024 were SUVs and trucks, with the F-150, Chevrolet Silverado, GMC Sierra, and Ram trucks selling a combined total of just over two million units.

There are, of course, many reasons why American automakers and buyers gravitate toward the full-size pickups dominating the U.S. vehicle market today. But one of them has a longer history than you might expect, dating back to the decades immediately after WWII and a trade war over chickens, of all things. What do chickens have to do with trucks? Let's find out.

Before the Chicken Tax, there was the Chicken War. This so-called war kicked off in 1962, when what was then the European Economic Community (EEC, also known as the European Common Market) opted to increase levies on imported U.S. poultry. Until then, the EEC — consisting of West Germany, Italy, France, Belgium, Luxembourg, and the Netherlands — had been a major consumer of U.S.-sourced chicken, with American exporters making as much as $35.5 million from German consumers alone.

Faced with an onslaught of cheap imported poultry, EEC member nations fought back; the Dutch claimed that Americans were dumping chicken below cost, while the French and German bodies claimed they were artificially fattening the birds with chemicals like arsenic and estrogen. Regardless of the veracity of these claims, mid-1962 saw the Common Market raise levies to 13.43 cents a pound (up from 4.8 cents in Germany), eliminating the price advantage that U.S. poultry producers had over their European counterparts. In the process, the EEC hoped the move would help shore up its agricultural production and reduce its dependency on American imports.

The results were immediate: American poultry exports dropped to just $20 million in 1962. The U.S. wasn't happy about this, of course, and a possible trade war began looming on the horizon.

Europe's decision to nearly triple the tax on U.S. poultry did not go down well with the American government, but Europe wasn't going to back down easily. The two sides would be at loggerheads about the tax over the next 12 months or so. First attempts to find a compromise in mid-1963 fell flat when the EEC asked for an auto-adjusting tariff system in exchange, while a later offer from the EEC to cut the levies by 10% was deemed insufficient by the U.S. 

Faced with an impasse, talk of retaliatory taxes on the part of the U.S. began bubbling up toward the end of 1963. However, it wasn't until U.S. President and famed Amphicar owner Lyndon B. Johnson took office in November that this talk became a reality. President Johnson issued Proclamation 3,564 in early December, outlining new taxes for four product categories that would take effect on January 7, 1964. These were potato starch, which would now be taxed at 2.5 cents per pound; brandy valued at over $9 per gallon, which would be subject to a $5 tax per gallon; dextrine, taxed at 3 cents per pound; and, finally, trucks worth $1,000 or more, which would be subject to an additional 25% tariff on top of the price.

And so the Chicken Tax, for better or worse, came into being.

Reading the list of new tariffs, it wouldn't have been odd too feel that the tax trucks stuck out like a sore thumb. The Chicken War was supposed to have been about agricultural products, after all. Trucks didn't seem to have much to do with all that. Turns out, they had a lot to do with it — in a way.

To explain the situation, we have to turn back the clock slightly, to the years leading up to the Chicken Tax. West Germany wasn't the only country straining under the weight of cheap imports in the late 1950s and early 1960s: The U.S. was in the same boat with imported vehicles. Namely those from Volkswagen, whose now-iconic Beetle and Type 2 Transporter buses were all the rage domestically. Volkswagen sold more than 180,000 units of the former in 1962, while U.S. Type 2 registrations peaked at just under 37,000 units in 1963. VWs were big, and everyone wanted one.

United Auto Workers (UAW) was, of course, unhappy about the popularity of these imports. The union had spent most of the 1960s building a huge war chest — $59 million (more than $600 million in today's money) — for a strike in 1964, which was set to be an election year. Keen to keep the union on his side and avoid a potentially disruptive strike, President Johnson agreed to UAW leader Walter Reuther's demand to take action against Volkswagen by including light trucks in his Chicken Tax.

President Johnson's Chicken Tax had the desired effects, at least as far as the UAW was concerned. The value of German truck imports in the U.S. dropped by a third in 1964, with only $5.7 million worth of vehicles making their way across the Atlantic. The Beetle was unaffected, but the Type 2 suffered greatly: Fewer than 5,000 examples of the latter were registered in the U.S. from 1964 to 1967. VW's commercial trucks and buses effectively disappeared from the U.S. market soon after.

However, the tax didn't just affect Volkswagen. The blanket tariff applied to all imported small trucks, including the Japanese mini trucks starting to make a name for themselves in America. Japanese automakers like Datsun began importing their trucks into the U.S. as cab chassis without beds; this reduced the tariff to a much more manageable 4%. These companies — and their American partners, such as Chevrolet — would then install the beds once the cab chassis were in the U.S. Subaru took a different approach to much the same end, installing rear-facing jump seats in the bed of its BRAT mini truck, qualifying it as a passenger vehicle with a 2.5% tariff.

Imported mini trucks managed to make the best of the situation for a while, but the good times didn't last forever: U.S. Customs closed the cab chassis loophole in 1980, while the BRAT's trick was rendered unusable in 1989 (although Subaru had discontinued the BRAT a couple of years earlier in 1987). Things were going to have to change.

One of the most immediate effects of the tightening regulations was that Japanese automakers decided to sidestep any tariff-related headaches by establishing U.S. factories. Honda was one of the first, with Honda Accords rolling off the assembly lines of its Marysville, Ohio plant starting in 1982.

Nissan followed a year later in 1983, with a white Nissan 720 mini truck being the first vehicle to leave the factory floor. The 720 kept the spirit of its Japanese-built predecessors going and set the stage for a series of American-built pickups from the company, including the ultra-reliable Nissan Hardbody trucks and modern offerings like the 2025 Nissan Frontier.

Toyota joined the party in 1984, joining forces with GM to form New United Motor Manufacturing, Inc. (NUMMI), giving birth to badge-engineering efforts such as the fifth-generation Chevrolet Nova (essentially a Toyota Corolla in disguise). Toyota eventually established its own foothold in the U.S. in 1986, founding Toyota Motor Manufacturing U.S.A. in Kentucky and continuing to offer its pickup trucks to American consumers.

Despite Japanese automakers establishing U.S. factories and continuing production of compact trucks, the next couple of decades would see the Big Three develop a huge hold on the American pickup market. In the first few years of the 1990s, for example, Americans purchased nine to 10 times more domestic light trucks than imports and transplants combined. Sure, transplants — vehicles built in the U.S. at foreign-owned factories — got more popular as the decade went on, hitting a peak of 435,000 units in 1994, but that was a drop in the ocean compared to the 5 million domestic trucks sold that year.

This went hand-in-hand with the gradual disappearance of compact trucks from the marketplace. Back in the mid-1980s, for example, one in four trucks sold were compact trucks. By 2001, though, the market was dominated by medium- and full-sized offerings: Ward's reported that Ford sold more than 850,000 F-150s in 2001, while Chevrolet moved 700,000 Silverados that same year. In contrast, the compact Ranger only sold 270,000 units or so. But even that reduced share was better than the foreign transplants, with the front-runner Toyota Tacoma only managing just over 160,000 units despite domestic assembly allowing the company to keep prices competitive. American buyers, it seemed, preferred American trucks.

Sales of domestic compact truck models would drop by around 60% between 2001 and 2009, signaling the end of demand for that kind of vehicle in America. Ford discontinued the Ranger after 2012, while Chevrolet replaced the compact Colorado with a mid-sized second-generation version that year.

Now, it would be reductive — and inaccurate — to blame the decline of the compact pickup truck on the Chicken Tax. After all, Toyota and Nissan moved their flagship pickups — the Tacoma and Frontier, respectively — into the midsize segment in the mid-2000s, showing that buyer preferences had also changed. But it's also not unreasonable to say the heavy 25% tariff may have potentially stopped foreign automakers from importing trucks they already offer in other regions into the U.S., thereby limiting and indirectly influencing customer tastes.

For example, Toyota's no-frills IMV 0 pickup platform would cost around $10,000 if it were available in the U.S. — less than half the price of the $25,000 Ford Maverick, the most affordable pickup truck available in the U.S. While there's no guarantee it'd sell well, a cheap pickup based on Toyota's IMV platform would conceivably be perfect for those who want low-cost utility in a compact form factor, and don't need most (or all) of what giants like the Ford F-150 provide. And there is a market for such a truck. Just look at the recent rise in popularity of small Japanese kei trucks, which states like Texas are planning to let owners register for road-going use.

It's not hard to imagine that many potential buyers end up buying a brand-new American-made truck when faced with the headaches of importing used Japanese trucks. And while we won't call it a bad choice, it's not without its own set of problems.

We're not going to deny that American pickups are very capable workhorses. The most powerful diesel pickups on the market will haul and tow just about anything — if you regularly need to tow 30,000 pounds' worth of gear behind you on a road trip, then they're obviously the right choice. But let's be real here: how many truck owners do anything close to that on a regular (or semi-regular) basis? As it turns out, very few. 

An Edwards survey from 2019 revealed that 75% of truck owners only ever used their trucks to tow once a year at most. A similar percentage, just under 70%, went off-roading once a year or less. And if those two statistics weren't damning enough, the survey also found that more than a quarter of pickup owners didn't even haul loads regularly, with 35% admitting that they used the bed once a year or less.

Given that, it's quite plain to see that many of the pickups and SUVs on the road are mostly status symbols. That's not inherently a bad thing, but pickup trucks pose a few handful of problems compared to regular cars, not least of which being their increased lethality in pedestrian accidents and their disproportionately high share of automotive greenhouse gas emissions in the U.S.

Would having a greater choice of pickups change the situation drastically? It's hard to say. But it's not particularly radical to suggest that the Chicken Tax has helped shield the Big Three from competition in the pickup space for the past four decades. It's a recurring theme, and one noticed by organizations like the Cato Institute and Green Car Reports for years — former Hyundai CEO John Krafcik even expressed similar notions to NPR a few years ago.

The gist is that the Chicken Tax has forced non-U.S. automakers to either set up assembly lines in the U.S. or abandon the truck market altogether, allowing the Big Three to focus exclusively on money-spinning big pickups and SUVs at the cost of smaller vehicles. And, sure, a resurrected Ford Ranger is available for those who don't want to go huge, but the current offering is a much larger product than the compact Ranger of old.

There's also the issue of price: The hybrid V6 version of the 2025 Ford F-150 costs around $70,000, while the 2025 Chevrolet Silverado 2500 HD can easily reach $75,000. Some observers have attributed this situation to the Chicken Tax, and these prices — and the long loans associated with them — have prompted some to suggest that the U.S. market is hitting "peak truck," before an inevitable fall. It's not too far-fetched, either, as consumers seem to be moving toward smaller, cheaper vehicles. 

Case in point: Honda Civic and CR-V sales grew 21% and 11%, respectively, in 2024. In contrast, Ford's F-series pickups, Chrysler's Ram pickups, and Chevrolet's heavy-duty Silverados all sold worse than in 2023

Despite some talk about eliminating the Chicken Tax a decade or so ago, the Johnson-era tariff continues to play a defining role in the American truck market, for better or worse. Unfortunately for proponents of economic liberalization or anyone who just wants cheaper trucks, the situation doesn't look like it's going to change any time soon.

If you're even remotely clued in to current affairs, you're also probably aware that things may just get worse. Industry analysts suggest that the Trump administration's plans to slap a 25% tariff on products from China, Mexico, and Canada — countries that build a lot of vehicles for the American market — may lead to more expensive cars across the board. Even with the month-long reprieve granted to the Big Three, all signs point to the tariff situation getting even more complicated.

All the while, American buyers miss out on some great pickups unavailable in the U.S., some of which — like the Toyota Hilux and Land Cruiser 70 — would probably fit right in alongside all the usual names.