11/28/2018

How Trump's Threat to Impose a 'Chicken Tax' on Cars Could Impact the U.S. Economy

Economists estimate it would result in a net loss of jobs, revenue

President Donald Trump on Wednesday provided a big hint that the U.S. could soon impose tariffs on cars, trucks and auto parts coming into the U.S., a move that experts say would cause significant economic damage.

"The reason that the small truck business in the US is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country," Trump tweeted Wednesday. "It is called the 'chicken tax.' If we did that with cars coming in, many more cars would be built here and GM would not be closing their plants in Ohio, Michigan & Maryland."

Trump was referring President Lyndon B. Johnson's decision in 1964 to impose a 25 percent tariff on light trucks coming into the U.S. That came in response to a 50 percent German tariff on some chicken coming from the U.S. The tariff became known as the "chicken tax" on trucks.

Please select this link to read the complete article from Business Insider.