The Frozen Chicken War was a trade dispute between the United States and Europe in the 1960s over tariffs on frozen chicken exports.
It ultimately led to unexpected consequences for the automobile industry, particularly the "Chicken Tax ”, which still affects American vehicle manufacturing today.
The Frozen Chicken Dispute (1960s)
After World War II, advances in U.S. poultry farming led to a massive increase in frozen chicken production.
By the late 1950s, American frozen chicken exports flooded European markets, particularly West Germany and France, where they were significantly cheaper than local poultry.
European farmers, unable to compete with U.S. prices, pressured their governments to take action.
In 1962, the European Economic Community (EEC) (the forerunner of the EU) imposed high tariffs on U.S. chicken imports, effectively blocking American poultry from European markets.
The U.S. Response: The "Chicken Tax" (1963)
In retaliation, President Lyndon B. Johnson imposed a 25% tariff on certain European imports, specifically:
Light trucks (including pickup trucks and vans) – targeting Volkswagen and other European automakers.
Potato starch – affecting Dutch producers.
Dextrin (a type of glue) is aimed at European chemical companies.
Brandy – targeting French producers.
The most significant and lasting effect of this retaliation was on light trucks, an industry where Volkswagen was gaining popularity in the U.S. market.
How It Affected the Automobile Industry
European automakers were hit hard, notably Volkswagen, which sold large numbers of VW Type 2 "Transporters" (early versions of vans and pickups).
After the 25% tariff, VW and other European companies largely abandoned the U.S. light truck market.
This gave American automakers (Ford, GM, Chrysler) a virtual monopoly on light trucks and pickups, a dominance that persists today.
As a result, pickup trucks became the most profitable segment of the U.S. auto industry.
Long-Term Effects of the Chicken Tax
Strengthened U.S. Pickup Truck Industry
Domestic manufacturers like Ford, GM, and Chrysler benefited from reduced foreign competition.
Pickups and SUVs became key profit drivers for American automakers.
Foreign Workarounds to Avoid the Tariff
Some foreign automakers found loopholes:
Ford imported vans as passenger vehicles (which had a lower tariff), then removed the rear seats after arrival.
Other companies shipped vehicles in parts and assembled them in the U.S. to avoid the tax.
The tariff limited consumer choices, making imported trucks far more expensive or unavailable.
This helped shape America’s preference for larger, U.S.-built trucks and SUVs over smaller European-style vehicles.
Lasting Trade Policy
The 25% tariff remains in effect today, long after the original chicken trade dispute ended.
While other retaliatory tariffs from the Chicken War were lifted, the light truck tariff stayed due to pressure from U.S. automakers.
This continues to shape the U.S. market, favoring domestic truck production.
In the 19th century, the United States used tariffs as a primary economic tool to encourage domestic industrial production and protect American manufacturers from foreign competition.
These tariffs played a crucial role in shaping the country's economic development, fostering its industrial revolution and reducing dependence on European imports.
Tariff of 1816 – The First Protective Tariff
The War of 1812 disrupted trade with Britain and Europe, revealing the weakness of the U.S. manufacturing sector.
In response, Congress passed the Tariff of 1816, which imposed duties of 20-25% on imported manufactured goods, particularly textiles, iron, and leather.
Goal: Protect young American industries from British competition after the war.
Impact: It encouraged investment in U.S. factories, particularly in the Northeast, which led to the expansion of the American textile industry.
Tariff of 1828 – The "Tariff of Abominations"
It was designed to protect Northern industries but was strongly opposed by the agrarian South.
Raised duties to 45-50% on imported textiles, iron, and other manufactured goods.
Impact: Encouraged growth in American ironworks, cotton mills, and metal industries, particularly in Pennsylvania and New England.
Southern states, which relied on imported European goods and exported cotton, saw it as unfair, leading to sectional tensions.
Tariff of 1832 & the Nullification Crisis
Attempted to reduce the high rates of the 1828 tariff but still maintained protection for Northern industries.
South Carolina, led by John C. Calhoun, declared the tariff null and void, nearly leading to secession.
The Compromise Tariff of 1833 gradually reduced tariff rates to ease tensions, but protectionism remained.
Tariff of 1842 – A Return to Protectionism
After the Panic of 1837, Congress sought to revive the economy by raising tariffs again.
Increased duties back to 30-40% on industrial goods.
Impact: Helped U.S. iron, coal, and textile industries grow as they faced less competition from British manufacturers.
Morrill Tariff (1861) – High Tariffs and Industrial Expansion
Passed on the eve of the Civil War, it significantly increased tariff rates (to around 38%) to fund the war and encourage industry.
Impact:
Helped northern factories produce weapons, railroad materials, and textiles for the Union Army.
Southern states, which opposed tariffs, saw this as another example of Northern economic dominance, contributing to the secession movement.
Post-Civil War Tariffs (1865–1890) – The Era of High Protection
Tariffs remained high throughout the late 19th century, particularly under Republican administrations.
The McKinley Tariff (1890) raised rates to nearly 50%, protecting industries like steel, textiles, and machinery.
Helped the rise of industrial giants like Carnegie Steel and Rockefeller’s Standard Oil.
Encouraged domestic production of railroads, farm equipment, and consumer goods.
This angered farmers and consumers, who had to pay higher prices for goods.
