What Is the Chicken Tax on Imported Trucks?

Willy Shih says the chicken tax is a tariff on imported light trucks, and it is a reason Detroit's profits sit on trucks and SUVs. The tariff came out of a trade dispute. SUVs are built on that light-truck platform, so the tax protected the vehicles that became the profit center. He says the price ended up higher than it might have been without the tariff.

Toyota and Nissan have built more light trucks in the United States, and in Mexico, over the last decade or so. Walking the Toyota factory in Georgetown, Kentucky, he heard the plant manager confirm that the site still makes sedans, uses parts mostly from nearby states, employs American workers, and buys American-made steel under a long-term deal with a supplier. Other factories he has visited still import steel, because it remains cheaper from Asia even with a steel tariff.

A tariff has a cost, and a domestic industry can still be built. Doing it takes a broader plan than a tax at the border: longer agreements with suppliers, and a less transactional way of buying.