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25 Percent Import Truck Tariff Must Go, AIADA Testifies

17 June 1999

25 Percent Import Truck Tariff Must Go, AIADA Testifies

    WASHINGTON, June 15 -- In testimony today before the United
States International Trade Commission, the American International Automobile
Dealers Association (AIADA) called for the elimination of the 25 percent
import truck tariff on the grounds that it represents a significant trade
barrier to pickup truck imports and that consumers would benefit from greater
competition in the light truck segment.
    David F. Mungenast, Sr., immediate past chairman of AIADA and president of
the Dave Mungenast Automotive Famiy in St. Louis, testified on behalf of the
association: "Originally imposed as retaliation against West German's poultry
practices, the 25 percent import truck tariff has evolved into a permanent
trade barrier. What was intended to be a temporary tariff has been on the
books for more than 35 years.  Today, because of the punitive nature of the 25
percent import truck tariff, no light-duty pickup trucks are imported into the
U.S."
    In 1998, three of America's top five selling vehicles were pickup trucks,
Mungenast pointed out, noting that the light truck segment, including pickups,
is the fastest growing segment of the automotive marketplace.  "However, in
the light truck segment, competition is hindered because of the punitive 25
percent import truck tariff.  Reducing the tariff will increase competition
and provide America's consumers with a greater selection of trucks."
    Mungenast also testified that there is no valid reason to maintain the 25
percent truck tariff:

    *  The U.S. and Europe long ago resolved their dispute over frozen
       chickens and all other targeted products have had their tariff rates
       reduced to the original rate.
    *  Domestic automakers do not need protection, they own 90 percent of the
       pickup truck market in the U.S.
    *  Reducing the tariff won?t cost anything.  Since no pickup trucks are
       now being imported, the customs service doesn?t collect any revenue as
       a result.

    In closing, Mungenast urged the Commission to recommend to the
Administration that the 25 percent truck tariff be among the tariff items
discussed at the World Trade Organization's Third Ministerial Conference,
which will begin in November in Seattle.

    AIADA is the trade association for the nearly 10,000 American-owned
franchised businesses that sell and service international nameplate
automobiles in the U.S. and provide jobs for more than 350,000 dealership
employees.