'Chicken Tax' on Pickup Imports Is Likely to Disappear

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Thanks in large part to the possible ratification of a pair of new trade agreements negotiated by the Obama administration — the Trans-Pacific Partnership, and Transatlantic Trade and Investment Partnership — the 25 percent "chicken tax" placed on imported midsize pickup trucks could be more quickly minimized or disappear all together.

According to Automotive News, the tariff imposed to protect American auto companies by saddling imported pickups with an additional tax to price them out of competition could be phased out to make it easier for global midsize pickups to be sold in the U.S.

Although it's a complicated issue, some experts predict that no matter how easy the new trade agreements make bringing new vehicles to the U.S. marketplace, we're not likely to see the midsize pickup segment grow quickly. Even though there are several midsize pickups that are not sold in the U.S. — the Ford Ranger, Volkswagen Amorak, Toyota Hilux, Mitsubishi Triton and Mazda BT-50 — meeting the difficult U.S. safety regulations as well as having enough money to build a plant (estimated to cost $2 to $3 billion) will likely keep the segment with the "least competitive intensity" relatively small for some time.

Regardless of what happens with the proposed trade agreements, the midsize pickup segment is likely to grow at a glacial pace. It might even spawn a smaller pickup segment that could provide a lower entry price yet still offer a good amount of carrying capability.

Cars.com photo by Evan Sears




@Mark Williams

Most of those mid-size trucks you named like the Triton, BT-50, Ranger Colorado, and Hilux would not be effected by the Trans-Pacific Partnership since they are made in Thailand and Thailand is not apart of the TPP.

If those manufacturers are truly serious about shooting down FCA, GM and Ford truck sales, they're going to have to make both mid-size and full-size pickup trucks.

Lifting tariffs is a start. IIRC these FTA's also address harmonization of safety and emission standards. Compliance in those areas cost around 25% more. If you add chicken tax that was equivalent to 50% duty.

These FTA's will not hurt full sized trucks but they will help meet niche markets.

I doubt Ford will bring the Ranger since they say it is too close to the F150. We might see the Amarok and other bit players.

Mahindra Has the money and the want to do this. If this is one step in the right direction for them you can bet mini trucks will surface within 3-5 years. They already have met diesel tractor regulations for emissions recently. They are a great company to invest into this. Hope to hear more good news like this. i would love one of those cab over chassis cab trucks i see in Australia. They arent good for our highways but they would work perfect in the city.

As is highly known I disagree with the protection of basic consumer item like fridges and pickups. It does nothing to help the consumer.

I agree with Mark Williams on this one and the overall sentiment regarding the numbers of mid size initial sales.

I also suspect that Mazda with the BT50 might have some hurdle to overcome with Ford in selling the ute in the US.

I also read and posted a link regarding the Thais. If all else fails the pickups can be knocked together in Malaysia and then exported into the US market. Proton has links to Mitsubishi.

Thailand also is attempting to enter into the Trans Pacific Trade wheeling and dealing. But the Thai political situation is not very good with the constant overthrows of governments by the military who tend to side with the Thai Royal family.

@Big Al

I don't see how you can say our tax on imports is hurting consumers. I have not seen one valid point that you have made that has proven that it is hurting consumers and their truck options. I think it is funny you say this being the the US has far more pick up truck options that Australia.

1. F150
2. F250
3. F350
4. F150
20.Titan XD

So how many pickup truck options do you guys have in Australia?

Bte, I am talking about trucks, not coupes with pickup beds.

We have a far larger range of light commercials, including the vehicles you have listed.

What your comment has failed to recognise is the low number of manufacturers that offer pickups/light commercials for the US market.

Like Ford stated it will not sell the Ranger in the US because it will impact F-150 numbers. So the chicken tax and other barriers have limited and influenced Fords decision. If the mid size market was twice the size it is now I would bet Ford would of had a different view.

Having cheaper pickups from outside of NAFTA will force the average transaction prices of pickup downwards. Even if they sell in small numbers.

As can be seen with the new fantastic F-150 it does not take many negative numbers to have an impact.

The US market is large enough to support what would be smaller niche players in the pickup segment. Like any form of capitalism that uses supply-demand the non sellers will leave the market.

A free supply-demand system in the light commercial vehicle segment is non existent in the US as this article states. It just is not viable to have vehicles on offer in the US without unviable investment or taxes that make it uncompetitive to import.

Great now we'll have 4 hp import trucks coking up the road ways cause they aint got enough get up and go to get out of the fing way! Then the wheels and doors falling off china cheap trucks at a faster rate then FCA trucks!

The peak demand for compact trucks did not occur back when the US let imports ship over beds separate from cabs for "Domestic Assembly" which effectively circumvented the chicken tax (cf Datsun, Toyota & VW compacts), it occurred about a decade and a half later (mid to late 90s), when the products were thoroughly "Americanized".

Nor do I think that there will be an influx of 'low cost compact trucks', given that the overseas trucks built by Ford, Toyota and Nissan are all midsizers.

Also, there's no chicken tax for cars. So where are the Geely & Mahindra cars? The Toyota Camry outsells the midsize truck segment all by itself.

No manufacturer is going to try to get a beachhead in the US on the basis of a small, low cost compact truck--the market is minuscule and sales volumes for even a small dealer base would be starvation level.

That leaves what? Hyundai/Kia? As the only manufacturer likely to benefit, and since they don't make trucks anywhere else, why would they build them in Korea and send them here?

@Big Al

1.I am not Denvermike

2. You said consumers so why are you talking commercial trucks now? That will only add to my list.

You still have failed to provide any proof that US consumers as a whole are hurting like you claim and are "limited" like you claim. How many more pickup trucks do you guy have over there for you to be able to say we are "limited" over here. As you can see above we have twenty different trucks to choose from here (21 if you count the Ridgeline ). How many pickup options do you guys got over there?

You are acting as if there is some huge midsize truck segment in the US. Yeah, maybe there is in certain sections of the US like where they are most popular in the New England states, but the US as a whole prefers bigger trucks. Just because you don't agree with that and prefer smaller trucks does not mean we are "limited" as you say.

Lastly, you lost the right to dictate to us what we should do with our truck market. Whether you think it is good or bad is of no concern to us. You have no say so in this so why on earth you continue to comment on it is beyond me. Are things that boring over there for you to use up so much of your time to continually ya'll about our truck market?

So tell me Al, how many more truck options do you guys have over there for you to say our tariffs are "limiting" us? 22?...... 24?..... 26? What's the number?

@ RORONG: I guess you forgot about this with m&m:


Thomas Lemon - there is no chicken tax on cars but there is a 3% import tariff. Interestingly enough the profit margin is reported to be around 3% on USA built cars. Domestic full sized pickups are reported to account for most of GM and Ford's global profits. Profit margins are supposed to be 25% - 40%. More coincidence?

"I would be in for Hilux"


I doubt Toyota would import the Hilux, their existing factories and trucks are doing just fine. Same for the Ranger, Ford deemed it unnecessary. By the way, the tax is not being repealed and TPP is a bad deal.

"I would be in for Hilux"


I doubt Toyota would import the Hilux, their existing factories and trucks are doing just fine. Same for the Ranger, Ford deemed it unnecessary. By the way, the tax is not being repealed and TPP is a bad deal.

That was oxi's comment on the auto news site.

There is a reason smaller import trucks are not around here, and the main one is because they are not safe. Somethings you just don't compromise.

Whether of not the amount of imported trucks increases drastically or not is not the question? The question is a 25% tariff that was created over 50 years ago for the purpose of getting back at European tariffs that were enacted to protect their poultry market against cheaper US poultry. The European tariffs were wrong as well and hurt consumers. Any tariff this high will effect consumers and manufacturers as well. The rational that I see from Thomas Lemon and Hecho En Mex-Ico V8 is basically that a 25% tariff that was enacted over 50 years ago as a retaliatory tariff should be kept because it will not make any difference. This sounds like UAW propaganda to me. Does't Thomas Lemon represent the UAW? If the Chicken Tax wouldn't make a difference in the US truck market then why keep an out of date tariff on the books that cost tax dollars to enforce? I am willing to bet that Mr. Lemon is strongly against any measure that would repeal the Chicken Tax and would in fact be in support for high tariffs levied against any imported vehicle or any increased taxes on foreign manufacturer that produce in the US that employ non UAW workers.

They all had compact trucks in the US and there wasn't enough desire to have one back then and there isn't enough desire to have one now for the average american. Toyota is the only one that sells in numbers to make it a worthwhile investment in the US market..... Cause you aren't just going to bring a Hilux or BT50 into the US market without significant investment to bring them to US standards. left hand drive, crash safety and worthiness, US clean emissions and Cafe standards as well as Carb standards.

Its the same reason you can't import left hand drive models into Australia with out spending 30+k to retrofit and cobble together them to make them pass there safety rules and regulations of the down under. Same goes for bring a car into the US......

I think part of the reason that many of these people on this board champion the US open there market is they aren't truly happy with there current products and they know the US opening there markets the manufactures would have to step up and offer a better product to compete in the US market cause an improvement in there vehicles they purchase. The world wants Raptors, power wagon's, 6.2 chevy's and TRD Pro's, big powerful diesels but they can't have them with out rich man type investments to convert them. Hence the reason they have to buy lifts and suspension modifications to there trucks to make them offered worth which we don't have to do in the US.

@Jeff S

You could not be more wrong that it is a UAW propaganda as I am very anti-UAW. You also cannot use the UAW excuse either as Jeff S or Big Al since the UAW is actually a global organization and have many chapters overseas.

You ask why keep the tariff? Just look at the soon to be non-existent Australian automotive manufacturing industry.

America is not the only one who creates tariffs protecting its economy either. Australia has subsidies and laws protecting its mining industry which is its cash cow. China has tariffs. The EU has tariffs. So do just about every country in the world. So why is the US seen as a bad guy for having a truck tariff when the rest of the world has them? Why does some guy who declined his US citizenship to live in Ozland want to paint the US as being evil for wanting to protect its own economy when every country in the world does it?

As I pointed out before, this has not limited the American consumer in any way when it comes to choice. In fact the US has more pickup truck choices than that of Australia and most global markets. Not only that, but the vehicles cost less here too. Take a Colorado Z71 4x4 double cab short bed with no other options. In the US it will cost you a little under $35,000 per Chevies website. The same GM Holden Colorado Z71 4x4 Double cab short bed and no other options would be 61,880 in Australian dollars per Holden's website . Convert that to the American dollar and the truck is roughly $47,600 dollars for the same thing you can get here for over $11,000 less. Hell, even our half ton trucks have an average transaction price for less than that.

So I ask, where is the real benefit that Al is talking about when not only does he have less of a selection in pickup trucks, but they cost considerably more over there? I am failing to see how lowering tariffs is a good thing like Al is claiming.

Hit nail on the head. Ford gets 90% of its profits from the sale of Pickup Trucks in the U.S. That is its entire Global profits, last thing it wants is non US imports killing that profit. U.S. Manufacturers and the UAW are very much against dropping the tax for that simple reason

@ Hecho En Mex-Ico V8
No it is not a "Global organisation" it has problems covering transplants in the U.S.
US Pickup choice only relates relates to Ford, GM, Chrysler, Misubishi and Toyota. Midsize offerings are very dated products for the last two

@Mark Williams
US HDT Conventional Trucks have to pass Euro rollover/crash standards before they can be sold in Australia, South Africa and New Zealand, the only other places outside NA where they are sold in quantity. Not all those models meet the standards

UAW members belong to more than 600 local unions across the U.S., Canada and Puerto Rico.

Where We Work

The UAW is one of the nation’s most diverse unions, representing workers in manufacturing, health care, higher education, gaming, public service and other sectors.

Auto manufacturing: For more than 70 years, UAW members have set wage and benefit standards for workers in America’s auto industry. More than 100,000 UAW members work in production and skilled trades at U.S. auto assembly, stamping, engine and powertrain plants. UAW members produce top quality cars and trucks for a number of manufacturers.... read more

Auto parts: Tens of thousands of workers who make seats, interiors, batteries and other key vehicle components are UAW members. Our members work for dozens of companies … read more

Aerospace and Defense: UAW members work in demanding, high technology jobs in America’s aerospace industry. More than 25,000 highly skilled men and women are from 59 UAW UAW local unions and serve 51 companies in both the commercial and defense sectors of the aerospace industry.

Ag-imp and construction equipment: More than 22,000 UAW members produce top-quality tractors, combines and other farm implements, as well as excavators, bulldozers and other construction equipment for leading manufacturers such as Caterpillar, Case New Holland (CNH) and John Deere… read more

Heavy Trucks: UAW members produce top-quality heavy trucks at U.S. plants operated by leading manufacturers, including Freightliner, Mack, Volvo and Navistar International…. read more

Health care: UAW members work as nurses, respiratory therapists, X-ray technicians, health aides and fill many other critical positions in community hospitals, clinics, nursing homes and vision care facilities.... read more

Higher Education: The UAW is the union of choice for more than 40,000 workers at America’s colleges and universities. UAW members in a variety of campus professions – teaching assistants, research assitants, post-doctoral researchers, faculty, administrators, clerical and technical staff – have wone pay raises, improved health care benefits.... read more

Gaming: UAW representation is growing fast in this fast growing industry, with 10,000 members in six states. UAW members deal cards in casinos, fix and maintain slot machines, operate keno and simulcast games, and work as top-ranked jai alai players.... read more

Public Sector: More than 50,000 public sector workers are UAW members, providing top quality public services in every conceivable occupation. UAW members drive ambulances in California, pilot ships on the waters off Nantucket and Martha’s Vineyard, fight fires in Grand Rapids, tend zoo animals in Lansing.

Also: The UAW membership is far more diverse than can be described in any single list of categories. Our Technical, Office and Professional (TOP) members are attorneys, industrial designers, librarians, museum curators, journalists, TV reporters and camera operators, and much more.

In manufacturing, UAW members produce well-known consumer products including Kohler bathroom fixtures, Lennox home furnaces and air conditioners, Miller beers, Colt firearms, Master Loc locks, Land O' Lakes butter, Folger's coffee, Libby's and Crosse & Blackwell canned foods, and Planter's nuts.

The UAW is truly a union of all workers, uniting people from different occupations, employers and industrial sectors. We all work together for a common purpose: to win social and economic justice for all working families, at home and abroad.

@Greg Baird
Still not " Global" , and does not encompass all Automotive activity in the U.S. And Canada

Disappointing that in his praise of the new trade authority granted to the president by the US Congress, Mark Williams falls in line with the rest of the media in the US and calls this legislation Obama's.

This partnership, as it is being called, only passed in Congress because Republicans--from the leadership on down, pushed it.

Few of the president's Democrats were willing to stand with him on the new agreement.

Mark Williams is a big Obama supporter like many in the mainstream media. I'm still waiting for the economy to come around like he has been saying will happen any day now for the past 6 years. He hasn't read the bill and doesn't know what is in it, but will credit Obama for it and is already saying the chicken tax will "likely" be removed.

Here is one important detail from the AN article he didn't mention...

"Fourth, some automakers told Automotive News that the chicken tax is not the only barrier keeping their smaller pickups out of the United States.

Toyota spokesman Scott Vazin said the size of the Hilux would make it a "tweener" in the U.S., overlapping too much with the full-size Tundra and midsize Tacoma. A Volkswagen spokesman said the company, which has said the tariff was the biggest impediment to selling the Amarok in America, now also doubts whether the truck is the proper size for the U.S. And a Mazda spokesman said the BT-50 would be a mismatch for Mazda's sporty, affordable-premium U.S. brand identity."

@Robert Ryan

Yes, the UAW is a global organization through its affiliates that gain money and aide multiple international unions. A union is a business like any other and the main premise of any business is to make money and grow.

"US Pickup choice only relates relates to Ford, GM, Chrysler, Misubishi and Toyota"

This is of your opinion. However in reality the all the trucks I stated above are made in North and Central America and are available in the US and Canada. So you may only relate those to US pickup choice, but then again you are a foreigner so not much that you say counts here. You guys from Australia tend to think that just because you say something then it is true for some odd reason. There must be something in the water over that makes you think that.

Here is one important detail from the AN article he didn't mention...

"Fourth, some automakers told Automotive News that the chicken tax is not the only barrier keeping their smaller pickups out of the United States.

Toyota spokesman Scott Vazin said the size of the Hilux would make it a "tweener" in the U.S., overlapping too much with the full-size Tundra and midsize Tacoma. A Volkswagen spokesman said the company, which has said the tariff was the biggest impediment to selling the Amarok in America, now also doubts whether the truck is the proper size for the U.S. And a Mazda spokesman said the BT-50 would be a mismatch for Mazda's sporty, affordable-premium U.S. brand identity."
Posted by: Greg | Jun 30, 2015 7:17:55 PM

So the truth comes out in the end. Flood of foreign trucks? Yeah right.

They are "tweeners" larger than a midsize, but smaller than a full size and taking the new Hilux a huge payload for a smaller vehicle, 2,700lb in the Hiluxes case. How do you sell that in the U.S.? It is neither a Midsize or a Fullsize, but with frugal diesel giving the Fuel economy of a compact. Buyers would be confused

No it is not Global,the UAW belongs to the International Federation of Free Trade Unions, but has a Union it has a pretty limited scope. It does not cover ALL Automive activity in the U.S. Or Canada

@Robert Ryan

Yes it is global through its affiliates.

Not Global it is affiliated with a Global organisation, it may run a Global campaign I.e Slavery in China, but has limited impact as a Specific Union.
Virtually all Unions Globally belong to this affiliation

@Scott, Nice to see someone challenging that pathetic parochial mantra that "Australia is the best place on Earth" for trucks. I'm in Australia, and yeah OZ sucks for trucks and sucks in general. We have a huge, passively-evil bureaucracy which is designed to punish achievers and reward the lazy and stupid. I make 6 figures and I live like a student here. The cost of living is outrageous, and the quality of everything from the housing to the trucks are terrible.

Paul in Oz, I thought you were based in the U.S.in fact I know you are. Maybe your confused?

@Robert Ryan

And again it is global through its affiliates which look out for each others best interest which is how I used it in my post.

@Rob Ryan, First time poster. Long time reader. I wish it wasn't true, but our selection of trucks suck, mate, compared to the States.

Ozzie Ozzie Ozzie, Oy Oy Oy.

I am also from Australia. Been here 20 years.

I'm moving back to the states within 3 years. Will probably move to Florida with BAFO and get me a used 2015 F-150.

@Hecho En Mex-Ico V8,

BAFO is jealous. That's all it is.

And he is not actually from Oz. He is from the Jersey shore. And is only here temporarily on a work visa.

Watch out for Big Al "not" from Oz. He is a scammer. He left the United States to go to Australia on a temporary basis. He claims to be moving back to the United States and possibly Florida soon.

It is great to see the comments directed at me.

Judging by the quality and content of the comments the person/s exhibit marginal creativity/knowledge, or better still, a sufficient response to counter my opinions.

I really do find this sad, so juvenile. If the person/s is representative of the average pickup owner/operator I can see the justification by many in the US that pickup owners are knuckle draggers.

Grow up, please.

@Big Al from Oz,
As someone else has commented the " intellectual elite" has decided to some spamming. Usual suspects, from the US(Canada?)

I agree with Ken and papa jim. BAFO is a fake Aussie.

Oy, Oy, Oy????????

Maybe Oi, Oi, Oi. Yet you qre an Aussie??????? Do I detect some pootang?

I do hope that PUTC does reel you in one day.

"Oi" is not an Australian word, in fact, the chant "Aussie Aussie Aussie, oi oi oi" is a variation of the British chant "Oggy Oggy Oggy, oi oi oi."

Most everything we use and do has been done before, even light commercial vehicles.

Innovation more so than inventiveness is the real drivers in our societies.

Most of it is evolutionqry my friend. Also, my comment had little to do with your input, but your orignal incorrect spelling of Oi.

Like I stated to you previously, you are as Australian as a crazy Irishman. You have made many errors regarding Australia.

I do think you are from Florida, LA and Winnepeg :)

"Big" Al, I'm not the one who wrote that other comment. I know you post comments under other names, but I do not. I know how to spell "oi," and I have heard the original chant long before Australian sports even adapted it. It's time to grow up little man. Speaking of many errors, "evolutionary" does not have a Q in it. Also, "is" is a singular linking verb, whereas "drivers" is plural. It amazes me how you blow up when you are proven wrong about something. Why do you feel like you always have to be right? Seriously grow up, you pompous prick!

Sorry Alex.

I had you confused with DenverMike.

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