How the Chicken Tax gave one Subaru its most famous feature
Have you seen the latest episode (CLICK HERE)? There's a brand new car and it's the biggest project the MCM lads have taken on in the show's history... but did you know this particular model was famous for a feature forced on Subaru?
While their 90s-on models are rightfully legends in their own rights, with World Rally Championship pedigree, turbo power, all-wheel-drive grip and more, one of the most iconic Japanese cars of the '70s and '80s is the Subaru Brumby (or BRAT in the USA).
BRAT stands for Bi-drive Recreational All-terrain Transporter, while Brumby referred to a native Australian horse renowned for its ability to go anywhere and live in harsh environments.
Produced from 1977-1994, across two generations this charming small ute was requested by the head of Subaru's USA division, intended to take on other utes in the small commercial vehicle class. These light "mini" trucks, many of which were Japanese, were more nimble, cheaper to run, easier to park, and in many cases more reliable than large American trucks of the day, and far nicer to drive than commercial vans.
There was one serious problem for Subaru's plans, though: a little thing called The Chicken Tax.
The Chicken Tax is a 25% tariff (AKA tax) on certain imported goods brought into the USA. And it all came about because, after World War 2, the USA flooded Europe with cheaply farmed chicken.
This angered governments over there as it was considered a delicacy, and their local farmers were losing a lot of money to these American imports. So the governments of several European countries either banned US chicken or applied a tariff to imported chicken.
In response, in 1963 President Lyndon B. Johnson enacted a 25% tariff on light trucks (and potato starch, brandy, and dextrin) imported into the USA.
Subaru were keen to sell their all-wheel-drive small utes at a sharp price point, but adding 25% tax would blow the Brumby/BRAT's business case clear out of the water. But then some Clever Doug worked out a maaaad loophole.
The Chicken Tax applied to Light Truck vehicles, not passenger cars. So how do you make a 2-door coupe-utility into a passenger car without redesigning the whole cabin? You bolt some all-weather plastic seats into the tray!
This fix was uniquely American, as the Suba-ute was never sold in its home market of Japan and Aussie Brumbys didn't require these seating shenanigans.
Americans loved the quirky idea, especially in warm western states where other large 4x4s like the Chevy Blazer and Ford Bronco sported convertible backs for a similar vibe. They were the hottest rides around at the time, and the Subaru was a quirky, small and cheap way to get the same thrills.
Interestingly, the Chicken Tax continues to this day, even though tariffs on brandy, dextrin and potato starch were rolled back years ago. And the global nature of car production has thrown some spanners in the works for manufacturers.
Tariff Engineering is the term describing how companies dodge these taxes. Ford was recently fined $1.3bnUSD in penalties for bringing their Transit vans into America as passenger vehicles, before removing the seats and passenger trim pre-sale. All this, because of cheap chickens!
