The Chicken Tax Explained: 25% US Truck Tariff
The 25% Chicken Tax on pickup trucks started as 1963 retaliation for European chicken tariffs. Learn how it still shapes the US auto market.
Table of Contents
TL;DR: In 1963, President Lyndon B. Johnson imposed a 25% tariff on light trucks, brandy, dextrin, and potato starch -- retaliation for European tariffs on American chicken. The brandy, dextrin, and starch tariffs were eventually removed, but the 25% truck tariff under HS 8704 has survived for over 60 years.
This "Chicken Tax" has shaped the entire US pickup truck market, inflated prices by thousands of dollars, and locked out foreign competition. It has also inspired some of the most creative tariff engineering schemes in trade history -- from Subaru bolting plastic seats into pickup beds to Ford importing vans with windows and then ripping them out on US soil.
What Is the Chicken Tax and Why Does a 1963 Poultry Tariff Still Matter?
The Chicken Tax is a 25% import tariff on light trucks -- pickup trucks, cargo vans, and commercial vehicles classified under HS heading 8704 -- imported into the United States. Despite its name, it has nothing to do with chickens today. A 1960s conflict between the United States and Europe over frozen poultry exports created the tariff.
Why Has the Chicken Tax Persisted for Over 60 Years?
What makes the Chicken Tax remarkable is not just its origin story but its persistence. More than six decades after Congress enacted it, the tariff remains fully in force -- even though negotiators resolved the underlying trade dispute within a few years.
The tariff has outlived the Cold War, survived multiple rounds of GATT and WTO negotiations, and weathered three presidential administrations that tried to negotiate it away. It has emerged from every trade agreement unscathed.
How Does the Chicken Tax Shape the US Truck Market Today?
The bottom line: this 25% tariff wall effectively bars foreign-built pickup trucks from the American market -- the most profitable vehicle segment in the country. The three Detroit automakers (Ford, General Motors, and Stellantis) have dominated the US truck market for decades, and the Chicken Tax is a significant reason why.
Key Takeaways:
- The Chicken Tax is a 25% tariff on light trucks (HS 8704) imposed in 1963 as retaliation for European tariffs on American chicken -- and it is still in effect in 2026.
- This single tariff has shaped the US automotive market more than almost any regulation: foreign automakers cannot profitably compete in the $150+ billion US pickup truck segment.
- Automakers have devised elaborate workarounds: Subaru added plastic jump seats to its BRAT pickup (reclassifying it as a passenger vehicle under HS 8703), and Ford imports Transit Connect vans with rear seats and windows that are stripped immediately upon arrival.
- The tariff survives because the US truck market is so profitable for domestic manufacturers that the political cost of removing it exceeds the trade policy benefit -- even trading partners rarely push for its elimination.
- Understanding the Chicken Tax illustrates how trade tariffs, once enacted, can persist indefinitely and create lasting market distortions far beyond their original intent.
"The Chicken Tax is the best example in trade policy of a temporary retaliatory measure that became a permanent feature of the industrial landscape. Once a tariff creates winners, removing it becomes nearly impossible." — Jennifer Hillman, Professor of Law, Georgetown University Law Center; former WTO Appellate Body Member
How Did a Chicken Start a Trade War?
The story begins in the 1950s, when advances in industrial poultry farming -- particularly in the southern United States -- dramatically reduced the cost of producing chicken. American poultry producers began exporting large volumes of inexpensive frozen chicken to Europe, where traditional farming methods made domestic chicken significantly more expensive.
By 1961, American chicken had captured nearly half of the West German poultry market. German and French poultry farmers could not compete on price. They lobbied the newly formed European Economic Community (EEC) -- the precursor to the European Union -- to impose tariffs on imported chicken.
The Timeline of the Chicken War
| Year | Event |
|---|---|
| 1955--1960 | US industrial poultry production booms; exports to Europe surge |
| 1961 | American chicken captures ~50% of West German poultry market |
| January 1962 | EEC imposes tariffs on imported poultry (HS 0207), effectively doubling the price of American chicken in Europe |
| 1962--1963 | US-EEC negotiations fail to resolve the dispute |
| December 1963 | President Lyndon B. Johnson imposes 25% retaliatory tariffs on four product categories: light trucks, brandy, dextrin, and potato starch |
| 1964--1967 | EEC reduces (but does not eliminate) poultry tariffs during the Kennedy Round of GATT negotiations |
| 1967 | US removes tariffs on brandy, dextrin, and potato starch -- but keeps the 25% truck tariff |
| 1963--2026 | The truck tariff remains unchanged for over 60 years |
The Johnson administration did not select these four product categories randomly. Each targeted a specific European constituency: brandy hit France, potato starch hit the Netherlands, dextrin had broader European impact, and light trucks -- the largest economic target -- hit Germany's Volkswagen directly.
At the time, VW was successfully exporting its Type 2 Transporter (the iconic Microbus/van) to the United States. The Johnson administration designed the 25% tariff to make that business unviable.
Why Was HS 8704 Targeted Specifically?
The distinction between HS heading 8703 (passenger vehicles) and HS heading 8704 (cargo vehicles) is central to understanding the Chicken Tax and every workaround that has been attempted.
| Classification | HS Heading | Description | US MFN Duty Rate |
|---|---|---|---|
| Passenger vehicles | 8703 | Motor vehicles principally designed for the transport of persons | 2.5% |
| Light trucks | 8704 | Motor vehicles for the transport of goods | 25% |
| Chassis with engines | 8706 | Chassis fitted with engines, for motor vehicles | 4% |
| Bodies (including cabs) | 8707 | Bodies (including cabs) for motor vehicles | 4% |
The duty rate gap between HS 8703 (2.5%) and HS 8704 (25%) is a factor of ten. This gap is what creates the enormous financial incentive for tariff engineering -- and what has protected the American truck market from foreign competition for six decades.
In President Johnson's calculation, targeting HS 8704 accomplished two goals simultaneously: it retaliated against Europe (specifically Germany's VW Transporter business) and it protected a growing domestic industry.
American automakers were beginning to produce profitable pickup trucks and commercial vans, and the 25% tariff wall gave them a decisive cost advantage over any foreign competitor.
"The 10:1 ratio between the truck tariff and the passenger vehicle tariff is the single largest classification-driven rate gap in the US tariff schedule. It has generated more creative compliance strategies than any other heading in the HTS." -- Michael Coursey, Director of Trade Advisory Services, Livingston International
How Have Automakers Tried to Avoid the Chicken Tax?
The 10x gap between 2.5% duty on passenger vehicles and 25% on cargo vehicles has inspired some of the most creative -- and sometimes absurd -- tariff engineering strategies in trade history. According to customs law experts, the Chicken Tax workarounds represent some of the highest-stakes classification disputes ever litigated in the US Court of International Trade.
The Subaru BRAT: Plastic Seats in the Pickup Bed
In 1978, Subaru introduced the BRAT (Bi-drive Recreational All-terrain Transporter) -- a small, unibody pickup truck built on the Leone sedan platform. Under normal circumstances, the BRAT would be classified as a light truck under HS 8704 and subject to the 25% Chicken Tax.
Subaru's solution was ingenious: they bolted two rear-facing plastic jump seats into the cargo bed, complete with seat belts. With rear seating, the BRAT technically qualified as a "passenger vehicle" under HS 8703 rather than a cargo vehicle -- dropping the import duty from 25% to 2.5%.
The seats were rudimentary at best. Subaru mounted them directly in the open truck bed with no weather protection, cushioning, or structural reinforcement. No one expected passengers to actually sit in them during normal driving (though some adventurous owners did). They existed purely to meet the passenger vehicle classification threshold.
The strategy worked for years until US Customs tightened the classification criteria in the mid-1980s, requiring more substantive passenger-carrying capability. Subaru redesigned the BRAT and eventually discontinued it in 1987.
Ford Transit Connect: The Warehouse Strip
Ford's approach with the Transit Connect is arguably the most brazen Chicken Tax workaround of the modern era. Starting in 2009, Ford imported the Transit Connect (a compact cargo van built in Turkey) in a configuration that classified it as a passenger wagon:
- Import stage: The vans arrived with rear windows, rear seats, rear seat belts, and rear heating ducts -- all features of a passenger vehicle classified under HS 8703, paying only 2.5% duty.
- Post-import conversion: At a facility in Ohio, workers immediately removed the rear seats, seat belts, and rear windows, replacing them with solid metal panels to create a cargo van.
- The result: A vehicle that was imported as a passenger wagon at 2.5% duty was converted to a cargo van and sold to commercial buyers.
In 2013, US Customs challenged this practice. The Court of International Trade ruled in 2020 that the Transit Connects were properly classified as cargo vehicles (HS 8704) at the time of importation, regardless of their temporary configuration. Ford owed approximately $181 million in underpaid duties. The appeals process continued, but the ruling signaled that CBP and the courts would look beyond surface-level configurations to determine a vehicle's "principal design" purpose.
Mercedes-Benz Sprinter: Assembly in the US
Mercedes (now part of the Stellantis group for the Ram ProMaster, while continuing the Sprinter independently) adopted a different strategy for the Sprinter van: partial assembly. Rather than importing complete Sprinter vans from Germany and paying 25%, Mercedes ships partially disassembled Sprinters (known as "semi-knocked-down" or SKD kits) to a reassembly facility in Charleston, South Carolina.
By importing components rather than complete vehicles, Mercedes avoids the 25% tariff on finished trucks. The components face much lower duty rates -- chassis with engines (HS 8706) at 4% and bodies (HS 8707) at 4% -- and the final assembly in the US adds domestic labor and value.
| Strategy | Brand | Import Classification | Duty Paid | Actual Vehicle |
|---|---|---|---|---|
| Plastic seats in bed | Subaru BRAT | HS 8703 (passenger) | 2.5% | Pickup truck |
| Windows + seats, then strip | Ford Transit Connect | HS 8703 (passenger) | 2.5% | Cargo van |
| Semi-knocked-down kits | Mercedes Sprinter | HS 8706/8707 (parts) | 4% | Cargo van |
| Domestic manufacturing | Toyota Tacoma/Tundra | N/A -- built in US/Mexico | 0% | Pickup trucks |
Building in the US or USMCA Countries
The most straightforward workaround is to simply manufacture trucks within the United States or in Canada or Mexico, where USMCA (formerly NAFTA) allows duty-free trade for qualifying vehicles. This is why Toyota builds the Tacoma in Mexico and the Tundra in Texas, and why virtually every pickup truck sold in America is built in North America.
The Chicken Tax has effectively forced any automaker serious about the US truck market to invest billions in North American manufacturing facilities -- exactly the kind of domestic industrial investment that protectionist tariffs are designed to encourage.
How Does the Chicken Tax Affect Truck Prices in America?
The economic impact of the Chicken Tax extends far beyond the 25% duty rate itself. According to the Peterson Institute for International Economics, by eliminating import competition, the tariff allows domestic manufacturers to maintain higher prices and profit margins than would exist in a competitive market. The cumulative cost to American consumers runs into the tens of billions of dollars annually.
Price Impact Estimates
| Factor | Impact |
|---|---|
| Direct tariff on a $30,000 truck | $7,500 added cost |
| Indirect price inflation (reduced competition) | Estimated $2,000--5,000 per vehicle |
| Average US truck transaction price (2025) | ~$58,000 |
| US truck market annual revenue | $150+ billion |
| Estimated annual consumer cost of Chicken Tax | $10--20 billion |
Full-size pickup trucks are the most profitable vehicles in the American auto industry. Ford's F-Series alone generates more revenue than most Fortune 500 companies. The Chicken Tax ensures that this extraordinarily profitable market segment remains effectively closed to foreign-built competition.
Without the Chicken Tax, foreign manufacturers like Mahindra (India), Great Wall Motors (China), SsangYong (South Korea), and others would be able to export competitively priced trucks to the US market. Some of these manufacturers produce capable trucks that sell for $15,000--25,000 in other markets -- vehicles that would offer American consumers dramatically more affordable options.
Why Has the Chicken Tax Survived for Over 60 Years?
The persistence of the Chicken Tax is a case study in how trade policy, once enacted, creates its own political constituency that fights to preserve it. Despite three presidential administrations attempting to negotiate its removal, the tariff remains unchanged -- a testament to the power of concentrated economic interests over diffuse consumer costs.
Who Benefits from the Chicken Tax?
- Detroit automakers -- Ford, GM, and Stellantis (Ram) earn their highest profit margins on trucks. The Chicken Tax protects these margins from import competition.
- Auto workers and unions -- The United Auto Workers (UAW) supports the tariff because it protects manufacturing jobs that might move overseas if trucks could be imported freely.
- States with truck manufacturing -- Michigan, Texas, Indiana, and other states with major truck assembly plants benefit from the economic activity the tariff protects.
- Truck component suppliers -- Thousands of parts manufacturers across the US supply the domestic truck industry.
Who Loses?
- American consumers -- Higher truck prices, fewer choices, and less innovation pressure on domestic manufacturers.
- Foreign automakers -- Effectively locked out of the most profitable vehicle segment in the world's largest auto market.
- Commercial fleet operators -- Pay inflated prices for work trucks and cargo vans.
- US trading partners -- The tariff is a persistent irritant in trade negotiations.
The political calculus is straightforward: the beneficiaries concentrate in a few large companies, a powerful union, and specific manufacturing states with significant electoral votes. Meanwhile, the costs spread across millions of consumers who pay slightly more for each truck without realizing why. This asymmetry explains why concentrated interests typically defeat diffuse consumer interests in trade policy.
What Does the Chicken Tax Teach About Tariff Policy?
The Chicken Tax offers several broader lessons that apply far beyond the automotive industry. In summary, these lessons are directly relevant for anyone involved in international trade, customs compliance, or studying how tariff policy shapes global markets over decades.
Lesson 1: Tariffs Outlive Their Justification
The original trade dispute was about frozen chicken (HS 0207). That dispute was largely resolved by the late 1960s. Yet the retaliatory truck tariff has persisted for more than 60 years. Once a tariff creates a constituency that benefits from it, removing it becomes politically costly -- regardless of whether the original justification still applies.
Lesson 2: Classification Boundaries Create Incentives
The 10x duty rate gap between HS 8703 (2.5% for passenger vehicles) and HS 8704 (25% for trucks) is the engine that drives every workaround. Where tariff schedules create sharp rate differentials between similar product classifications, creative tariff engineering will inevitably follow. On HSRates, you can compare the duty rates for HS 8703 and HS 8704 side by side across all three jurisdictions to see how this gap plays out in different markets.
Lesson 3: Trade Policy Shapes Industrial Geography
The Chicken Tax did not just protect existing US truck manufacturing -- it actively redirected billions of dollars in foreign direct investment to the United States. Toyota, Honda, Hyundai, and others built US factories specifically because the Chicken Tax made importing trucks uneconomic. In this sense, the tariff "worked" as an industrial policy tool, even if that was not its original intent.
Lesson 4: Consumers Bear the Ultimate Cost
Every trade protection measure has a cost, and that cost is ultimately paid by consumers through higher prices and fewer choices. The Chicken Tax adds an estimated $2,000--7,500 to the price of every truck sold in America -- a cost that totals billions of dollars annually across the entire market.
How Does the Chicken Tax Interact with Other US Tariffs?
The Chicken Tax does not exist in isolation. Imported trucks may face multiple layers of additional tariff authorities that stack on top of the base 25% rate, creating combined duty burdens that can exceed 125% for certain origin countries.
| Tariff Authority | Rate | Applicable to HS 8704? |
|---|---|---|
| Chicken Tax (base) | 25% | Yes -- core rate |
| Section 232 (steel/aluminum content) | Embedded in vehicle cost | Indirectly -- increases input costs |
| Section 301 (China) | Up to 100% on EVs | Yes -- stacks on top of Chicken Tax for Chinese vehicles |
| IEEPA (struck down Feb 2026) | N/A | No longer applicable |
For Chinese-made electric trucks (a growing category), the total tariff burden could theoretically reach 125% or more: 25% Chicken Tax + 100% Section 301 on Chinese EVs. This stacking effectively makes Chinese truck imports to the US impossible at any competitive price point. Use the HSRates duty calculator to estimate the combined tariff burden for any HS code and origin country.
Read more about how these tariffs stack in our guide: Section 301 vs. 232 vs. IEEPA: US Tariffs Compared.
Key Takeaways
- The Chicken Tax is a 25% tariff on light trucks (HS 8704) that President Johnson imposed in 1963 as retaliation for European chicken tariffs -- and it remains fully in effect in 2026.
- This single tariff has locked foreign automakers out of the $150+ billion US pickup truck market, the most profitable vehicle segment in the American auto industry.
- Automakers have devised creative workarounds: Subaru added plastic jump seats to reclassify as a passenger vehicle (2.5% duty), while Ford imported cargo vans with temporary passenger features that it stripped upon arrival.
- The tariff persists because its beneficiaries -- Detroit automakers, the UAW, and manufacturing-state legislators -- are politically concentrated, while its costs spread thinly across millions of consumers.
- According to industry estimates, the Chicken Tax adds $2,000--7,500 to the price of every truck sold in America, costing consumers an estimated $10--20 billion annually.
- Key takeaway: once a tariff creates a constituency that profits from it, removing the tariff becomes politically costly regardless of the original justification.
Summary and Next Steps
The bottom line: The Chicken Tax is a 25% tariff on light trucks that began as Cold War retaliation over frozen chicken and has persisted for over 60 years -- reshaping the entire US automotive market, inflating truck prices by thousands of dollars, and inspiring some of the most creative tariff engineering strategies in trade history.
- The 25% rate on HS 8704 versus 2.5% on HS 8703 creates a 10:1 duty gap that has locked foreign manufacturers out of the $150+ billion US pickup truck market.
- Automakers have responded with strategies ranging from Subaru's plastic jump seats to Ford's warehouse strip operations -- with mixed legal outcomes.
- The tariff survives because its political beneficiaries (Detroit automakers, the UAW, manufacturing states) are concentrated and powerful, while its costs are spread across millions of consumers.
- Key takeaway: once a tariff creates a constituency that profits from it, removing the tariff becomes politically impossible regardless of the original justification.
Use the HSRates duty calculator to estimate the combined tariff burden for any vehicle HS code and origin country, and compare rates across US, EU, and UK markets using the HSRates comparison tables.
FAQ
What exactly is the Chicken Tax?
The Chicken Tax is a 25% import tariff on light trucks (pickup trucks, cargo vans, and commercial vehicles classified under HS 8704) imported into the United States. It was imposed in 1963 by President Lyndon B. Johnson in retaliation for European tariffs on American frozen chicken (HS 0207). Despite its origin in a poultry trade dispute, the tariff has remained in effect for over 60 years.
Does the Chicken Tax apply to all trucks from all countries?
Yes, the 25% tariff applies to light trucks imported from any country, regardless of whether that country was involved in the original poultry dispute. However, vehicles manufactured in Canada or Mexico may qualify for duty-free treatment under the USMCA trade agreement if they meet rules-of-origin requirements. This is why most trucks sold in the US are built in North America.
Why has no president removed the Chicken Tax?
Multiple administrations have considered removing or reducing the Chicken Tax, but the political coalition supporting it -- US automakers, the UAW, and manufacturing-state legislators -- has consistently blocked any changes. The tariff's beneficiaries are concentrated and politically powerful, while its costs are spread thinly across millions of consumers, making removal politically costly with little concentrated upside.
How did the Subaru BRAT avoid the Chicken Tax?
Subaru bolted two rear-facing plastic jump seats into the cargo bed of the BRAT pickup truck, complete with seat belts. This converted the vehicle from a "cargo vehicle" (HS 8704, 25% duty) to a "passenger vehicle" (HS 8703, 2.5% duty). The seats were rudimentary and impractical, but they met the classification criteria at the time.
Does the Chicken Tax apply to electric trucks?
Yes. The Chicken Tax applies based on the vehicle's classification as a light truck (HS 8704), regardless of its powertrain. Electric trucks imported into the US face the same 25% duty as gasoline or diesel trucks. Chinese-made electric trucks face additional Section 301 tariffs of up to 100%, creating a combined tariff burden that effectively blocks them from the US market.
How much does the Chicken Tax add to the price of a truck?
The direct cost is 25% of the declared customs value. For a truck valued at $30,000, that adds $7,500 in duty. The indirect effect -- reduced competition allowing higher domestic prices -- adds an estimated $2,000--5,000 per vehicle on top.
The average US truck transaction price in 2025 reached approximately $58,000, significantly higher than in markets without equivalent import protection.
Sources & References
- Congressional Research Service: "The 'Chicken War': The US-European Economic Community Confrontation" -- Detailed historical analysis of the poultry trade dispute and retaliatory tariffs. Congressional Research Service.
- USITC Harmonized Tariff Schedule -- Chapter 87: Vehicles -- Official US tariff rates for passenger vehicles (HS 8703) and light trucks (HS 8704). US International Trade Commission, accessed February 2026.
- Court of International Trade: Ford Motor Company v. United States (2020) -- Ruling on Ford Transit Connect classification, finding the vehicles were properly classified as cargo vans (HS 8704) despite being imported with passenger configurations.
- Motor Trend: "The Chicken Tax and How It Shaped the US Truck Market" -- Automotive industry analysis of the tariff's impact on vehicle design, pricing, and market competition.
- Reuters: "How a 1960s Trade Dispute Still Protects US Truck Makers" -- Business reporting on the economic impact and political dynamics of the Chicken Tax.
- Peterson Institute for International Economics -- Trade policy research on the consumer costs of the Chicken Tax and other protective tariffs.