The Tax On Trucks | Planet Money | NPR

The Tax On Trucks  | Planet Money | NPR


[Lighter flicks] When it comes to selling trucks, U.S. carmakers have been blowing
away their foreign competition. U.S. trucks are basically automotive juggernauts. Turns out they owe that success to chickens. Well, frozen ones, anyway. It call goes back to the late 1950s, early
1960s. The European economy is finally getting better
after the end of World War II, and everyone in the world is sort of helping each other. This is an era of free trade. In America, people were beginning to fall
in love with German imports. Everyone wanted a Beatle — a Volkswagen Beetle,
that is. At the same time, Germany began importing
cheap, frozen chicken from the United States. Which was awesome for the German consumer, but not so awesome for the German chicken farmers. So the farmers got to the German government
and they say, “Protect us against this cheap, delicious, frozen American chicken that is
flooding the market!” And the government says, “OK, sure.” So it puts a 50 percent tax on imported frozen
chicken. And America is like, “Wait, wait, wait, what? Germany, we just helped you rebuild after
the war and you want to start a trade dispute? You want to tax our chicken? Fine. Fine. We will find some German things that we can
tax.” So in 1963, the U.S. goes and puts a 25percent
tariff on foreign trucks. That includes commercial vans, light trucks
and regular old pickups. And Germany wasn’t the only one affected. The U.S. applied it to all foreign-made commercial
vehicles. Volkswagen, who had been planning to send
over its new line of trucks, now found them too expensive to export. And just like that, the American car market
changed almost overnight. And American trucks were given a huge advantage
over their foreign competitors. They’ve held that advantage ever since. For the past 50 years, trucks have kind of
paid the bills for America’s automakers. The Ford F-150 has been one of America’s best-selling
vehicles for decades. The existence of the chicken tax has been
very profitable for American car companies. Now, these days the world’s a more complicated
place, of course. There are plenty of American automakers with
foreign interests. But the thing about tariffs is, they’re hard
to get rid of. Not because they’re always necessary, but
because they can be used as leverage. So in all likelihood, the chicken tax will
continue to stick around, and America’s signature trucks will remain dominant above the rest.

23 Comments

  1. solitude moods says:

    First! Interesting!

  2. Luis P says:

    Planet Money in Youtube?

    Best news since sliced bread.

  3. slofool says:

    Still prefer my Toyota truck

  4. Zack Abnet says:

    Love the podcast, please do more videos I wanna see who I'm listening to.

  5. Jonathon Doe says:

    @1:14 "This is beneath NPR's dignity" according to twitter this belongs to Linda Holmes, but what does it mean?

  6. David says:

    Automotive juggernaut. I dont think so.

  7. HowSci says:

    *Finally, a podcast with videos. Yay!*

  8. Aaron Cabral says:

    1:34, poor wiener !

  9. Paul Marado says:

    Liberalism is a disease

  10. JuxtaposedStars says:

    Good video, but there are some minor points to mention. The tax only applied to trucks under certain weight limits or with certain seating arraignments. There are several notable examples of countries legally circumventing the tax with various methods(see ford transit connect for one example).
    Additionally, the F-series sales numbers can be misleading. The F-series doesn't just include F-150s, but commercial/medium duty vehicles like the F-250, 350, and 450. Ford does not provide a breakdown of sales by distinct model, but current production numbers indicate at least 1/3 of all F-Series built are not light duty trucks. These models would be competing against imports already exempt from the chicken tax.
    The Ford Ranger, which ceased production in the USA in 2012, had benefited more from the tax than the F-series. I think this lack of competition led to stagnation in the Ranger's design and a lack of any major investment from Ford to significantly upgrade the Ranger over its 29 year production life.
    New Ranger models, designed for other countries, continued to be built in Thailand, Argentina, and South Africa. They were not imported for sale into the USA, in part, because of the chicken tax. In 2015 Ford spent more than $700 million to convert their Michigan Assembly Plant to begin domestic production and sales by the end of 2018.

  11. Emilie Mack says:

    Short, entertaining, and educational. Perfect. Looking forward to showing this to my HS economics students.

  12. k. rich says:

    I love this. Thx planet money for the funny shorts

  13. Mick Mickymick says:

    So is that tariff still in place? Wouldn't that mean that the US trucks would be of lower quality because they don't have to compete fairly against foreign trucks? Meaning the US consumer gets screwed. In the rest of the world, I don't think US trucks are the most popular, which means they're not the best and US consumers have to pay extra for a lower quality product.

  14. Kraken says:

    Yaaaas Planet Money Videos ❤️❤️❤️

  15. Kevin O. McCann says:

    How should we get fair trade Mr. podcast?
    Personally, I worry more about patent infringement and stolen trade secrets from countries like China. It is difficult to measure because it has untold effects for what may not come to exist. When thinking of patenting an item, the thought that it will just be stolen enters the calculations. Some may think: not worth it. I do not know if, and I doubt, we do that back at them. I don't know if it is just news hype; but it has a real effect. That is what Trump-hole should emphasize. This protectionism crap is a spiral of cost and effect.

  16. Raju Miah says:

    Did the other countries retaliate?

  17. whitefangv says:

    I wish America had utes

  18. yb s says:

    Planet money is the goat

  19. Mike G says:

    Why did Planet Money wait nine months to mention these videos to their podcast listeners?

  20. Skyler Waite says:

    You guys aren't even trying to be different than Drunk History.

  21. Madden Williams says:

    Not going to talk about the Subaru Brat that got around the tax?

  22. HOY says:

    This seems a bit one sided

  23. Mich Po says:

    All problems will be solved if we make a law that says people can't buy large trucks to compensate for small d*s

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