Chicken Tax

The chicken tax is a 25% tariff on potato starch, dextrin, brandy, and light trucks imposed in 1963 by the United States under President Lyndon B. Johnson in response to tariffs placed by France and West Germany on importation of U.S. chicken. The period from 1961–1964 of tensions and negotiations surrounding the issue was known as the "Chicken War," taking place at the height of Cold War politics.

Eventually, the tariffs on potato starch, dextrin, and brandy were lifted, but over the next 48 years the light truck tax ossified, remaining in place to protect U.S. domestic automakers from foreign competition (e.g., from Japan and Thailand). Though concern remains about its repeal, a 2003 Cato Institute study called the tariff "a policy in search of a rationale."

As an unintended consequence several importers of light trucks have circumvented the tariff via loopholes—including Ford (ostensibly a company that the tax was designed to protect), which imported the Transit Connect light trucks as "passenger vehicles" to the U.S. from Turkey and immediately strips and shreds portions of their interiors, such as installed rear seats, in a warehouse outside Baltimore — and Mercedes, which imported complete vans built in Germany, "disassembled them and shipped the pieces to South Carolina, where American workers put them back together in a small kit assembly building." The resulting vehicles emerge as locally manufactured, free from the tariff.

One columnist for Atlantic Monthly took the occasion to bemoan the effect of industrialized chicken production on the quality of the chicken that the United States was exporting, calling it a "battery-bred, chemically fed, sanitized, porcelain-finished, money-back-if-you-can-taste-it bird."

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