Chicken Tax Ready For The Fryer, Hilux Et Al Not Ready For US Market
As key free trade agreements near signing, the chicken tax may soon become a bucket of Kentucky fried goodness. Just don’t hold your breath for a Hilux.
The Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership agreements would dismantle the 25 percent tariff on light-duty trucks like the Toyota Hilux, Ford Ranger and Volkswagen Amarok, Automotive News reports. The latter agreement would align vehicle regulations between the United States and European Union, as well.
However, even if the tariff were to come down like the Berlin Wall, imports of the aforementioned trucks — and others like them — won’t be forthcoming in the near term for a few other reasons, starting with how many of the 39 total nations involved in their respective trade agreements have pickup truck plants ready to send their wares to the U.S. There, Thailand — which isn’t among those signing at this time — produces most of the world’s mid-size trucks. However, the nation’s government has expressed interest in joining the TPP after its enactment, leading to potential U.S.-bound production.
Another reason for the delay comes down to the dismantling of the tariff itself, which is set to take years, if not decades, with Japan taking the longest at 25 years; the Japanese rollback is part of a bilateral U.S.-Japan side deal concurrent of the TPP.
Safety figures into this, as well, as trucks made for the global market aren’t made for the U.S.’ special needs. Meanwhile, differences in how trucks are packaged — big blingmobiles for American consumers, spartan utility for everyone else — are likely to stem importation for a while.
Finally, some automakers have concerns their products wouldn’t fare well in the U.S., ranging from product overlap and right-sizing, to brand identity.
In time, however, the trucks some have wanted will board container ships bound for ports on both coasts as automakers would come to see how much profit they could reap with the chicken tax tossed in the fryer, leading to more competition in the USDM truck game down the road.
(Photo credit: Toyota)
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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I thought that is why we were negotiating tariffs so that the US could get easier access to China and other Asian countries. You are not correct thinking that we are lifting this tariff without getting something in return. The original purpose of the Chicken Tax was to retaliated against a 25% poultry tax accessed against cheap US poultry imports. The poultry tax against US poultry no longer exists but the tariff against trucks still remains even though other parts of the Chicken Tax have expired. The Chicken Tax has outlived its intended purpose. https://en.wikipedia.org/wiki/Chicken_tax
I thought we were in the process of negotiating the FTA. This will probably happen and we will reach an agreement. If not then this tax will remain in effect until some agreement is reached in the future. As for the Chicken Tax itself if you would bother to read the link you would understand the original purpose of the tariff and why it has outlived its purpose unless of course you are for more taxes.