AI Summary
5 min readThe 60-year-old tariff that shaped America's pickup truck market
In 1962, a trade dispute over chickens led to a 25% tariff on light-duty trucks that is still in effect today. As Marketplace Morning Report host David Brancaccio put it, "everyone with a pickup truck has felt the effects of a tariff that never goes away." On a road trip along historic Route 66, Brancaccio and two automotive veterans—writer Jamie Kitman and former automotive CEO John Krafchik—kept returning to something they called the "chicken tax," a piece of protectionist policy that has quietly shaped the American vehicle market for six decades.
How a poultry dispute created a truck tariff
The story begins in the early 1960s. U.S. poultry producers had revolutionized chicken farming by figuring out how to mass-produce the birds. Germany, at the time, had a growing demand for chickens and was interested in importing more from the United States. But German poultry farmers pushed back, and the German government imposed a tariff on American chickens.
The U.S. response was swift—and oddly specific. As Krafchik explained, the U.S. government "put a 25 percent tariff on all light duty commercial vehicles or trucks, things that we know today as pickup trucks or commercial vehicles." The tariff was applied not just to European countries but globally. And six decades later, it remains in effect.
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What you'll learn
- 1 (01:20) **The Chicken Tax Origin Story** - Host David Brancaccio introduces the "chicken tax" as a tariff that never goes away, still affecting pickup truck buyers today.
- 2 (04:43) **Road Trip Context** - Brancaccio sets the scene: a 900-mile Route 66 trip with auto experts Jamie Kitman and John Krafchik, where the chicken tax kept coming up.
- 3 (05:07) **The Chicken Dispute Explained** - John Krafchik narrates the origin: U.S. poultry producers revolutionized mass chicken production and sought to export to Germany.
- 4 (06:18) **60 Years of Market Distortion** - Krafchik argues the chicken tax is a "formative" force in the U.S. auto industry, still in effect six decades later.
- 5 (07:08) **The Stagnation of the Pickup Truck** - American buyers lost access to affordable, diverse imported trucks and were left with only full-size domestic pickups and vans.
- 6 (07:55) **The Profit Engine** - U.S. automakers make enormous profits on pickup trucks, with the average transaction price now over $66,000.
- 7 (08:53) **The Tariff Genie Giveth and Taketh Away** - Brancaccio contrasts the enduring chicken tax with the Trump administration's 50% aluminum tariff, which is currently crushing Ford's profit on the F-150.
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Show Notes
In the 1960s, the German government put a tariff on American chickens. President Lyndon B. Johnson then retaliated with a tariff on light-duty commercial vehicles and trucks. The back-and-forth has come to define the U.S. auto sector. On this morning's show, why a veteran automotive CEO calls this chicken tax "one of the most important, formative aspects of how the U.S. industry has evolved." But first, markets try to guess whether the U.S.-Iran ceasefire will hold.
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