Ending The “Chicken War” : The Case For Abolishing The 25 Percent Truck Tariff

Overview: Having made huge investments in U.S. truck production, foreign producers are not about to leave even if the truck tariff is eliminated. After all, foreign carmakers continue to invest in new U.S. production facilities even though the duty on automobiles is only 2.5 percent. The bottom line is that car and truck producers want to manufacture in their biggest markets. If the truck tariff has any justification at all, it is as a bargaining chip in trade negotiations. However, since the major foreign pickup truck producers already manufacture in the United States, the truck tariff’s value as a bargaining chip is minimal. A U.S. offer to remove the tariff is of limited commercial value to foreign countries and thus is unlikely to “buy” much in the way of reciprocal market- opening offers. The truck tariff actually works to weaken the U.S. bargaining position by undermining the credibility of overall U.S. trade policy. Maintaining a tariff peak of 25 percent, almost 10 times the average U.S. tariff—is unfair to consumers and is jarringly inconsistent with the general U.S. commitment to open trade and ongoing reduction of trade barriers. The truck tariff should be eliminated as soon as possible.

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Format: PDF | Size: 81KB | Date: Jun 2003 | Pages: 12