Thursday, January 19, 2017

Trump Wants To Expand The Chicken Tax To Cars, A Terrible Idea

There’s a reason why you’ll pay up to $60,000 for a Ford F-150, a pickup truck that’s not much different than 20 years ago except for the trim and tech packages. American pickup trucks are overpriced and bloated. It once had something to do with chickens, but now it’s got a lot to do with soon-to-be President Trump’s threats to German automakers.
“If you want to build cars in the world, then I wish you all the best. You can build cars for the United States, but for every car that comes to the USA, you will pay 35 percent tax,” Trump said in remarks translated into German.
Stupid, stupid, stupid.
2017 Ford F-150
We already know this will fail, because we’ve been doing it for 54 years. Trump wants to extend the existing “Chicken Tax” from light trucks to cars. It will ultimately stifle competition, raise prices, and cost jobs, just like it has with pickup trucks.
The “Chicken Tax” was enacted in 1963 to punish Europeans, who restricted American chicken imports and accused the U.S. of “dumping” the birds on Europe below cost. This caused a 25 percent drop for American chicken exporters, who appealed to the government to help them. The result was a 25 percent tariff on potato starch, brandy, dextrose and light trucks.
The light trucks part was added by President Johnson to punish the (then-West) Germans who were selling VW vans in America. The problem with adding tariffs is that industries become addicted to them, and they never get repealed.
Read the rest from Steve Berman HERE.

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