Decades after it was implemented, Lyndon B. Johnson’s “chicken tax” has resulted in booming truck production in the United States.
Get away from the big cities and coastal suburbs of America and you will find yourself driving among a sea of pickup trucks. They account for 17% of all vehicles on the road today. According to Car & Driver, four of the top seven-selling vehicles in America are pickup trucks: The #1 Ford 150 series, the #2 Chevy Silverado series, #6 Dodge Ram, and #7 GMC Sierra.
The American pickup truck is more than just a vehicle; it’s a symbol of freedom, resilience, and the spirit of adventure. These rugged machines have been the backbone of American industry and culture for decades, embodying the values of hard work and determination. Whether it’s hauling heavy loads, navigating rough terrains, or simply cruising down the open road, the pickup truck is a testament to American ingenuity and craftsmanship.
One of the most compelling aspects of the American pickup truck is its versatility. It’s not just a workhorse; it’s a family vehicle, a mobile office, and a gateway to the great outdoors. The pickup truck has a special place in the hearts of many Americans. It’s a vehicle that brings people together, whether it’s for a weekend camping trip, a tailgate party, or a community service project. It represents the American dream, where anything is possible with a bit of grit and determination.
Yet some economists say the pickup truck is a case study in the failure of a longstanding tariff and protectionism. President Lyndon Baines Johnson imposed a 25% tariff in 1964 on imported pickup trucks because France and Germany had placed tariffs on U.S. chicken. The tariff become known as the “chicken tax.” And the imported pickup truck tariff has never been removed.
Sixty years later, Americans love to buy pickup trucks more than ever, automakers love to sell them, and foreign makers have brought pickup truck production to the U.S. to avoid paying the tariff. Over time, automakers have added amazing features to pickups. Once there is more widespread availability of fast charging networks and the political temperature on electric vehicles is lowered, there will be a ton of electric pickups sold. If that’s an economic failure, I’d hate to see what success looks like.
This is important context for the present debate on auto tariffs. Many economists are arguing that the new tariffs will result in sky-high costs for American consumers, less choice, and will stifle innovation. Hogwash. Sixty years of producing pickup trucks with a 25% tariff has demonstrated that outcome is not likely to be the case. The more likely scenario is that foreign automakers will locate more production in the United States.
The United States imported 7.8 million vehicles worth $222 billion from Mexico, Japan, Korea, Germany, and Canada last year. Setting aside Canada ($28 billion) for the moment, if we captured even 33% of that, it would represent a $60 billion-plus boost for the American auto ecosystem.
There is a big upside to a permanent tariff on auto imports, and if the history of the pickup truck is a guide, we’ll be better off for it.