Stan Zin weighs in. You’ll recall: In the early 1960s, Europe placed tariffs on US chickens. The US retaliated by placing a 25% tariff on imported trucks, which is still in place. Stan, and the trusty Wikipedia, adds:
- Why trucks? President Johnson was paying off the UAW. Really, there are tapes of White House conversations that document this.
- What happened to chickens? When Europe’s Common Agricultural Policy established price floors for agricultural products, the tariff became irrelevant and was phased out.
- Why bring this up now? The “chicken tax,” as it’s known, is being reconsidered. This happens every few years, with no change to date, more than 50 years later.
- Does it work? Trucks made in Mexico and Canada are exempt under NAFTA, but there’s no question it affects production and trade patterns. Some companies have found workarounds. Ford is reported to make trucks in Turkey, with rear seats added to make them passenger vehicles for import purposes. Once they clear customs, they rip the seats out and sell them as trucks.
That’s trade policy in the real world.