Hate SUVs? Blame Chickens!

A Chicken in Every Garage

Great article in the NY Times on how a trade war with Europe in the 1960's set the stage for the ascendancy of the SUV and Light Truck markets in the USA.

It started in 1961 with chicken. Trying to stop a surge of chicken imports into Germany, the European Common Market bowed to the European poultry lobby and almost tripled the tariff on frozen chicken from the United States. Washington, of course, struck back. In 1963, it raised tariffs on a range of European products: brandy to hit the French; dextrine, a food and glue component, to hit the Dutch.

To target Germany, the Johnson administration imposed a 25 percent tariff on light-truck imports, a barrier that fell on Volkswagen, which exported vans to the United States. “Why should we be the scapegoats in the chicken war?” lamented Heinz Nordoff, Volkswagen’s chief executive at the time.

The chicken war ended, but the tariff survived. It explains a lot about why Detroit chose to stake its future on S.U.V.’s.

The Law of Unintended Consequences at work.