Monday, October 5, 2009

Avoiding the "Chicken Tax"

In 1963, the US imposed a tax on imports of foreign-made trucks and commercial vans in response to European tariffs on imported chicken. These restrictions remain in place today, which puts US automaker Ford in a strange position.

Ford builds its Transit Connect vehicle in Turkey and imports it to the US. To avoid having the vehicle defined as a commercial van, Ford ships them with windows and seats. Once they have passed through customs, however, Ford strips out the seats and removes a number of the windows. Installing and removing the seats and windows costs hundreds of dollars per van but reducing the import tax saves thousands.

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