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The chicken tax: Why it's hard to find a small pickup truck

An all-new version of the Chevrolet Colorado small pickup is coming to a dealership near you. Given the "chicken tax," I'd say that's something of a miracle.

Chicken tax? Miracle? Finally, something new in pickups that are not monstrously big – too big for urban and suburban parking stalls? Yes, yes, read on.

Fifty years ago, the United States slapped a 25 per cent tariff on imported brandy, dextrin, potato starch and small pickups. This was in retaliation to tariffs on imported American chicken imposed by countries like France and Germany.

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To this day, the 25 per cent tariff on small pickups remains. That why Ford Motor doesn't sell the made-in-Thailand Ranger pickup in Canada, even though 15,000-20,000 Canadians bought and loved the Ranger, year after year. For decades, Ford manufactured the Ranger in Minnesota, which meant no chicken tax. But when that plant ceased production, Ford could no longer make an economic case for the Ranger in the U.S. And if it doesn't make sense for the U.S., it's not coming to Canada.

Mitsubishi also builds a dandy small pickup in Thailand and company officials here in Canada have told me over and over they'd love to sell it here, too. But between the chicken tax and the cost of meeting crash test standards which could run to a $1-million dollars, Mitsubishi Canada – like Ford – can't make the economic case for its small pickup.

Certainly there's a market for such a pickup in Canada, but there's no profit in it for Ford and Mitsu. Both say they need the U.S. market, too. I should also note that an added complication in Canada is the 6.1 per cent duty on imported vehicles not built in the NAFTA zone. That tax is not so large as to cripple small pickup sales, unlike the 25 per cent chicken tax on imported small pickups to the U.S..

At this point you're probably wondering how Toyota and Nissan have found a way to make money on the Tacoma and Frontier mid-size pickups, respectively. The Tacoma is built in Mexico and that makes it a NAFTA model, free of tariffs. The Frontier is built in the U.S., so no chicken tax on that truck either.

This brings us to the new Chevrolet Colorado. GM Canada has confirmed it will come to Canadian showrooms next fall as a 2015 model. We'll get our first look at it next week at the Los Angeles auto show. The first version of the truck is launching this month in Thailand, with others hitting showrooms around the globe at later dates.

"The new Chevrolet Colorado is generating a lot of excitement as we begin its launch in Thailand," said Chris Perry, vice president, global marketing and strategy for Chevrolet. "We think the design, capability and fuel efficiency of the new Colorado will make it attractive to U.S. customers." And Canadians, too.

GM will share more details next week, of course. For now, I can tell you that the outgoing Colorado and its GMC sibling, the Canyon, have been built in Shreveport, Louisiana and the next version will also be built in the U.S.

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So General Motors has seen fit to keep building an urban and suburban pickup in North America, thus nullifying the impact of the chicken tax – and for Canada the 6.1 duty placed on imports, too. Such smart thinking about small rigs like the Colorado seems in short supply these days.

Canadians and Americans are going to get a new option in pickups – a small one and that's something of a small miracle.

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