Question

a) What is the “chicken tariff?” What does it have to do with light trucks and SUVs?

b) Who benefits from the “chicken tariff” on light trucks? Why do you think the tariff is still in place?  

c) What do you think about U.S. consumers paying more for light trucks and SUVs or other products because of this? Whose interests should be the paramount concern of government trade policy: the interests of producers (businesses and their employees) or those of consumers?

Answer 1

a) Chicken tax or chicken tariff is a 25% tariff imposed on imported light trucks along with potato starch, dextrin, brandy by the U.S. government after a tax was imposed by the France and west Germany on the imports of U.S chicken. It was levied in 1964 under the presidency of Lyndon B. Johnson under the general agreements on tariffs and trade. And SUVs are also considered light trucks the law applies to them too.

b) The big producers of the light trucks and SUVs benefit from the chicken tariff as they are the one's that sell to the U.S. market as imported trucks are costly for the local public to buy. The tax on other products has been removed but the tax on light trucks is still in place.

c) The U.S. consumers suffer because of this as the light trucks have now become expensive for them to purchase.The government should serve the interests of the producers as they are the one's who produce the trucks and if they can produce it at low cost then they would sell at low costs two, serving two classes of people at the same time.