Podcast introduces an interesting question: when you think of mid-size sedans in the US, you can name a bunch of models made by both foreign and domestic car companies. But when you think of pickup trucks, you only really think about US companies.
Why do US automotive companies dominate the US pickup truck market in this way? It has to do with a tariff known as the chicken tax.
A tariff is basically a tax on importing goods and services into the United States. In the post-war 1950s, VW Beatles and Vans were common place in the US. In a seemingly unrelated tangent, the US chicken industry was selling massive amounts of frozen chicken in the West German market. After the chicken-craze took over West Germany, West Germans tried to domestically produce chickens and to bolster this industry, West Germany and France imposed a tariff on US chicken. The US chicken industry got upset at this and the US Government (Lyndon Johnson) retaliated with a tariff on any imported automobiles that were used for primary commercial purposes (i.e,. commercial vans and pickup trucks). The tariff as a 25% tax on these foreign automotives. This made the US market costly for foreign companies to compete in the pickup truck space.
Foreign companies tried avoiding this by shipping parts to the US and having them assembled in the US. Most of the time, this did not work, and US Customs enforced the tariffs on the parts too. Under NAFTA, though, manufacturers in NAFTA countries were able to ship assembled pickup trucks to the US without any tariff. Thus, many autocompanies manufacture pickup trucks in Mexico and ship to the US to avoid the tariff. Domestic companies do this, but so do foreign companies.
Book Summaries. Less than 272 words. 