“They do everything they can to stop our American companies from being able to sell in Japan. We don’t do that to them.”

       — Sen. Debbie Stabenow (D-Mich.), quoted in The Washington Post, Nov. 17

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       Stabenow accompanied President Biden on his trip to the Detroit area to promote U.S.-made electric vehicles. She made this comment while extolling a proposed tax credit that would provide a $4,500 rebate for union-made electric vehicles.

       The “union-made” requirement would aid the Big Three U.S. automakers with crews represented by the United Auto Workers — GM, Ford Motor, and Stellantis, the parent company of Chrysler. But it has been criticized by nonunion domestic automakers such as Tesla, and foreign companies with assembly plants in the United States.

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       We were struck by the last part of Stabenow’s comment — that the United States does not do anything to make it more difficult for Japanese manufacturers to sell their vehicles in the United States.

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       The senator is ignoring a tariff — the “chicken tax” — that has been in place for nearly 60 years, shaping the U.S. auto market in significant ways.

       The Facts

       In 1962, the European Community restricted imports of U.S. chicken products at the behest of West German chicken farmers. When talks to resolve the dispute failed, President Lyndon B. Johnson in 1964 decided to target a then-popular German vehicle, the Volkswagen Kombi-Bus, with steep retaliatory tariffs of 25 percent.

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       Under trade rules, all such “light trucks” needed to be targeted and supposedly the light-truck sales matched the lost chicken sales. But White House audiotapes of Johnson’s conversations with Walter Reuther, the UAW’s president, suggest Johnson was also seeking to head off a UAW strike before the 1964 election by placating Reuther’s concern about rising Volkswagen sales.

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       Somehow, this 25 percent tariff on light trucks — the chicken tax — has never been repealed. By contrast, automobiles from overseas face only a 2.5 percent tariff.

       That’s the kind of disparity that affects markets. After all, given how low most U.S. tariffs are, most foreign parts used to assemble trucks in the United States would only be subject to tariffs that are a fraction of 25 percent.

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       U.S. manufacturers earn so much profit from light trucks that they produce comparatively fewer automobiles. The light-duty truck class now includes pickup trucks, sport utility vehicles, vans and minivans — and those products represent more than 70 percent of U.S. vehicle sales.

       “It is no wonder much of the initial foray by Japanese transplants to the U.S. involved setting up truck assembly plants,” noted Harvard international trade professor Robert Lawrence in a 2009 blog post that argued the Big Three’s reliance on light-truck sales made it difficult for them to respond to rising demand for hybrids and more fuel-efficient cars.

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       The chicken tax “has insulated Ford and GM from competition from Europe for light trucks for more than 50 years,” said Mark Perry, professor of economics at the Flint campus of the University of Michigan, in an email. “Of course, Toyota and Nissan and other foreign-based automakers build trucks here to avoid the 25 percent chicken tax, but the domestic trucks like the Ford F-Series, Chevy Silverado and Ram pickup have maintained a dominant market share versus the trucks from foreign automakers, which I think is a direct result of the 25 percent tariff that has protected [them] from foreign-built trucks since the 1960s. And trucks like the Ford F-Series are hugely profitable for Ford, largely from the high prices they can command, which again I think is a result of the chicken tax.”

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       Manny Manriquez, general director of the Japan Automobile Manufacturers Association in the United States, noted that in contrast to the U.S. tariffs, Japan has no tariffs on passenger cars and trucks.

       “Japanese-brand automakers build where there’s significant demand for our vehicles, and since we’ve focused for decades on developing, designing and building vehicles for U.S. consumers, and ensured that the U.S. is one of our most important global markets, we have a vast U.S. R&D/design and manufacturing footprint here,” he said in an email. “Japan and the U.S. have very different auto markets, and every country has differing regulations based on conditions on the ground.”

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       Robyn Bryan, a Stabenow spokeswoman, said that Stabenow was “referring to the long-standing ‘non-tariff barriers’ that have prevented U.S. companies from accessing the Japanese market. About 95 percent of the cars on Japanese roads are Japanese-made. The United States has expressed concerns for many years on the lack of access to Japan’s market for U.S. autos.”

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       Among the “non-tariff barriers” cited by U.S. officials as limiting U.S. vehicle sales in Japan are an opaque regulatory process, unique standards, delayed certification of advanced technologies, and discriminatory zoning rules for dealerships and repair shops.

       Bryan added that “Japanese automakers like Toyota have nonunion plants in the U.S. because they want to avoid paying union wages. Regardless of those tariffs, which have been in place for decades, Japanese companies have access to an enormous U.S. market. The U.S. does not have that same access to the Japanese market.”

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       But note that Stabenow had claimed the United States does not take actions to prevent Japanese sales. That’s clearly wrong, given the 25 percent tariff on light trucks. Japanese manufacturers may have found ways around the tariff, but it still exists.

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       Meanwhile, as the Atlantic magazine has documented, U.S. manufacturers have not put in the same effort to sell cars in Japan. Japanese consumers expect extraordinary service from their dealers — something U.S. firms have not invested in. European vehicle manufacturers have done better in Japan, the Atlantic said, because they have spruced up their dealerships to provide the service that is expected in that country.

       “The bottom line is that in a competitive marketplace, you have to offer vehicles that consumers want to buy,” Manriquez said. “This is as true for Japan [as] it is for the U.S., which is why Japanese-brand automakers design specifically for American consumers.”

       The Pinocchio Test

       The chicken tax for decades has shielded U.S. companies from competition in the light-truck sphere — which now happens to be almost three-quarters of the entire vehicle market. That’s a prime example of how U.S. policy had sought to make it harder for foreign manufacturers such as the Japanese to sell in the U.S. market.

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       Indeed, there’s a certain irony in Stabenow making this comment as she advocated a tax break that also would give an advantage to the Big Three manufacturers over its foreign competition.

       Just about every country takes steps to bolster its homegrown manufacturers. But Stabenow should not pretend that the United States is innocent of such tactics. She earns Three Pinocchios.

       Three Pinocchios

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