I come to praise the chicken tax, not to bury it. In exchange for the short-term consequence of a few people paying too much for Toyota trucks with insta-rust beds, this country managed to acquire a pretty substantial infrastructure to build “foreign” automobiles while still providing jobs to Americans. It even helped the Japanese automakers, who managed to survive the 1985/1986 spike in the yen without abandoning the US market because they were largely in the process of moving production to the Southern states.
In recent years, however, the 25% tariff has come to be ever-so-slightly irrelevant, primarily affecting buyers of the Ford Transit Connect who can’t figure out why there are wrench marks on the floor of their brand-new cargo vans. And now it might be gone for good.
The Detroit News reports that the so-called “chicken tax”, which has been in effect since 1963, is very much on the table as the United States attempts to negotiate a “Trans-Pacific Partnership” with Japan and ten other Asian countries. Apparently we’re looking for some Japanese barriers to trade to be dropped in return. It should be noted at this time that, under previous administration, the official position of TheTruthAboutCars regarding barriers to American products in Japan could best be summed up as “Japan is a completely open market just begging for loads of imports from other countries and it’s all America’s fault that people don’t buy your crap.” Our current editorial position on this is, ah, somewhat more flexible.
Who would the winners and losers be from the removal of the tariff? Well, Mahindra and a few other manufacturers might take another stab at this market. European vans like the Jumpy and Kangoo and whatnot, particularly those assembled in Turkey and other low-cost nations, might get a look in as well. So prices would likely drop a bit and customer choice would increase. That’s a good thing.
Domestic truck manufacturers, including Honda/Toyota/Nissan, would see lower transaction prices but it’s unlikely that any of them would return truck production to Japan. For those of you who haven’t tuned in lately, a whole bunch of the ol’ quantitative easing and various financial disastrous stuff have combined to take their toll on the almighty dollar and make our country, ’tis of thee, a bit of a low-cost production area. Honda’s so firmly based in the United States that it’s hard to imagine the company ever moving any production of anything back to Japan. This is unlikely to cost American jobs to any significant degree, particularly now that Ford’s tooled up Kansas City to build the full-size Transit.
We’ll keep you posted on developments as they occur. In the meantime, if you’ve always dreamed of a Skoda Praktik or something like that… hold tight, but don’t start counting your chickens.