What is the 'Chicken Tax' and why is it bad for imported trucks?

If you’re an American fan of small pickups and other utility vehicles, you may often find yourself reading about unobtanium models that are sold in what seems like every automotive market but our own. Hey, this is America. We love trucks, right? Even tiny ones like the Ford Maverick have proven wildly successful, suggesting that small trucks imported from overseas could perform similarly well. So why don’t we see them? Blame the Chicken Tax. 

What is the Chicken Tax?

You’d be forgiven for assuming the Chicken Tax has something to do with transporting barn fowl, but believe it or not, the two are almost entirely unrelated. So how is it that we live in a world where chickens are to blame for expensive imported pickup trucks? Well, the simple (and simultaneously quite complex) answer is “politics.”

Essentially, “Chicken Tax” is a complete misnomer. It refers to an import tariff imposed on (among several other things) light-duty trucks. It gets its name not from its purpose, but from its genesis: it was conceived as part of a series of retaliatory tariffs intended to punish Europe for taxing American chicken exports. So there were chickens involved at some point, you see, just not in any way that relates to cars. The story is pretty wild, and we’ll refer you to this excellent Writeup by Wired if you’d like the full version.

How much is the Chicken Tax?

This is no small penalty: The import tariff on light duty trucks was set at 25%. That’s stiff enough to deter quite a bit of overseas competition, and as some automakers have learned, difficult (and not to mention costly) to circumvent. Ford recently settled a decade-long “Chicken Tax” investigation over its importation of Transit Connect utility vans in a way that it still maintains was compliant with U.S. regulations. Needless to say, federal regulators disagreed.

What does it apply to?

Nominally, the tariff was imposed on light trucks, but given how broadly that definition is used in today’s regulatory environment, it’s really more accurate to say that the Chicken Tax applies to utility vans and pickup trucks. Passenger vans and SUVs are exempt from the Chicken Tax, but not exempt entirely from import taxes. They’re assessed at a far more reasonable 2.5%. That’s why you see plenty of imported crossovers and sport ‘utes on the road, but not nearly as many trucks or cargo vans. 

In the early days, overseas manufacturers found ways around the Tax by exporting “chassis cab” models to the U.S. At that point, a bed would be attached to the rear frame and the entire truck could be sold as a pickup. This loophole was eventually closed. The Subaru Brat (as featured in the Wired story above) famously came with two jump seats in the back to qualify as a “passenger” vehicle until the law was adjusted to account for anything with a bed, jump seats or not. Womp-womp. 

Who pays the Chicken Tax?

In theory, the Chicken Tax is a cost eaten by the manufacturer and baked into the car or truck’s sticker price. In practice, very few manufacturers are subject to the Chicken Tax in 2024 because most trucks and cargo vehicles sold in the United States are built here. The rare exceptions tend to be smaller boutique builders whose customers may not love paying extra, but are likely able to afford it.