Kennedy was shot, the space race was on, Cold War politics were escalating all this was happening between 1961 and 1964. Had it not been for those minor things the Chicken War certainly would have received more coverage. Prior to WWII chickens were actually a luxury item all around the world. After WWII poultry farming really took off, chicken prices were crashing through the floor and Colonel Sanders was taking over the U.S. with Kentucky Fried Chicken franchises. U.S. chickens were so abundant we started sending huge amounts of them on trips to Europe and the people ate it up…quite literally, West German consumption rose 23%.
This became a problem for the Dutch who claimed the U.S. was selling below cost. So we could have world domination of the poultry market? The French, who thought hormones used could impact virility and Germany accused us of using arsenic to fatten them. While a good number of Europeans enjoyed the meal the government and farmers didn’t think it was figer lickin’ good. A minimum price was set across Europe for all imported chickens.
This greatly affected the U.S. chicken export market and the government became heavily involved in finding a resolution. A successful negotiation never resulted and in 1964 President Johnson implemented a 25% tariff on imported potato starch, brandy, dextrin and you guess it, light trucks. The reason for the truck tax at the time was because of another German car, the VW Beetle. Its strong appeal concerned the government that foreign manufacturers might start to import other vehicles. Today the 1963 tariff is still in effect for imported light trucks, the chicken tax.
Mercedes-Benz first brought their Sprinter van to the USA in 2001, marketed under both the Mercedes-Benz and Freightliner (and in 2003 Dodge) brand since Daimler-Benz had acquired Chrysler a couple years earlier and the chickens were a problem. To avoid the truck tax Mercedes would build the Sprinter fully in Dusseldorf, Germany where they are built alongside Sprinters for domestic use as well as other countries. Upon completion a Sprinter headed for the United States is then partially disassembled having it’s drivetrain and other major components that would classify it as a truck removed from the van body. The vans are then shipped to Ladson, South Carolina where Mercedes has a plant that reassembles them. This not only makes the delivery time of new vans very lengthy but as you’d imagine adds considerably to the cost. The cost, which is about an additional $1000, is added to each van and paid for by U.S. consumers. This means the tariff of 25% is not realized by the government and while it does create some jobs in South Carolina it comes at the price of these vehicles costing consumers more. Ford with its Transit Connect and the Ram ProMaster City have the same issues with their Sprinter competitors which are built in Spain and Turkey respectively.
Sprinter sales have been very strong since 2001 and it has become a strong selling vehicle in the U.S. market. Its success meant Mercedes needed a more competitive and more efficient long-term solution. The company is now building a $500-million plant in North Charleston, South Carolina where the Sprinter will be built along with the smaller Metris vans. The quality will improve since generally building something, taking it apart and then putting it back together doesn’t help things and the labor time in building the vehicles will be reduced.
So what about just getting rid of the chicken tax?
As part of the Trans-Pacific Partnership in 2016 that President Obama signed the chicken tax would have slowly been eliminated over about three decades however with the U.S. withdrawal from the TPP in 2017 the chicken tax looks to stay around for the foreseeable future. Because of this other manufactures have not brought their vehicles to the U.S. which include not only commercial and passenger vans but pickup trucks as well. It has cost American consumers a lack of innovation in the market from the reduced competition, a reduced number of choices for vehicles, and higher vehicles prices.
So, when you do buy your next Sprinter van celebrate with a bucket of original recipe and a Warsteiner.
Images: Copyright DaimlerAG