We dare you to read this definition while walking across hot coals. What's the matter...chicken?
The chicken tax was the start of the original tariff war. Brace yourself for a history lesson. In 1963-1964, during President Lyndon B. Johnson’s term as president, France and Germany slapped a tariff on chickens being imported from the U.S. Europe did this because these American birds were too plentiful and causing too much competition for the homegrown birds.
President Johnson was big mad, and to retaliate, he added a 25% tariff on everything Europe imported in large amounts and relied on...starch, light trucks (aimed specifically at Germany), and brandy (aimed at France). It was certainly efficient. Demand went way down for these products in the U.S. Nobody could afford the price increase.
But, as always, there were unintended consequences. Japanese-made trucks like Toyota were also hit with the tariffs as they came into the U.S., which made those prices escalate. To get around this, the innocent bystander Japanese manufacturers simply brought the trucks over in parts, and finished assembling once all the parts were in the U.S., making it officially a truck after it was imported.
The change to the process was a lightbulb moment for the Japanese automakers...why not just assemble autos in the U.S. all the time? And assemble in the U.S. they did. Production in the U.S. now had new competition, and auto manufacturing started to decline, especially in Detroit, MI, once the auto capital of the world. As you may be aware, Detroit is now struggling to keep residents, and has entire blocks of abandoned homes. This game of chicken involving tariffs still has rippling effects today.
