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June 7, 2021

Ford Could Face US$ 1.3 Billion In Penalties For Skirting Law Meant To Protect Them

Ford could be facing up to USD 1.3 billion in penalties because its Ford Transit Connect MPV skirted the U.S.’s so-called “chicken tax.”

“Chicken Tax,” refers to a legislation passed in the U.S. in 1964. It tacked on a 25 percent tariff on several imported products such as potato starch, brandy, and light trucks. This was a response to tariffs placed by France and Germany on U.S.-exported chicken. And while the tariffs on potato starch and brandy were eventually lifted, the tax on light trucks remains to this day as a means to protect Ford, Dodge, and Chevrolet. It’s for this reason you don’t see the U.S. importing the global trucks like the Toyota Hilux. Instead, they either build their own versions, or commit to assembling the model in the U.S. like the Ford Ranger and Chevrolet Colorado.

Ford, however, found a way to skirt the tax. It imported the Transit Connect for the U.S. market from Turkey as a passenger wagon, dropping its tariff to just 2.5 percent. It then brought the vans to a finishing facility in the stateside where it removed the rear seats and strip them down for conversion into cargo vans.

However, the U.S. government now claims that Ford intentionally misled customs by fitting these Transit Connect vehicles with cheap, mismatched rear seats intended solely to be thrown in the trash (the removed seats are indeed shredded and used as landfill). Ford though counters that every seat was equipped with all of the safety standard equipment required to be street legal, qualifying it as a passenger vehicle when it passed customs inspection.

In any case, the U.S. Supreme Court declined to hear its appeal, and with that could be seeking “as much as USD 652 million to 1.3 billion” in fines and penalties.

It’s somewhat ironic that Ford, one of the manufacturers the so-called chicken tax was intended to support has fallen into its grips. This will likely spell the end for the Transit Connect in the U.S., unless they opt to properly assemble them there. It’s tough to feel sympathy for a company who’s made such an effort to skirt the law. It seems Ford only operates ethically when it suits their bottom line.

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