Tariffs may cut imports of japanese light trucks
The Mazda Sundowner Sport is a small japanese pickup truck that gives nearly 30 miles to a gallon of gas, couches the riders in a comfortable, carlike environment, and costs around $6,000.
All the Japanese importers have similar trucks on US roads.
Come August, however, the sales outlook for such vehicles may take a decided plunged.
The US Customs Service has opted to reclassify imported cab-chassis units, thus pushing up the tariff from the current 4 percent up to 25 percent, the full tax on imported trucks.
Until now, the overseas manufacturers have been skirting the tax, with a nod from the Customers Service, by shipping the pickups to the US without the cargo box. In other words, when the "trucks" arrive in port, they are incomplete.
Toyota has been building and attaching the boxes to the chassis on the West Coast. Other companies have shipped the boxes separately from Japan and put the two parts together in the US.
As a result, the Japanese have been able to sell their trucks at a substantially lower price than if they'd had to pay the import tax at the full 25 percent rate. The upshot is the high-mileage pickups are even more competitive against the larger, lower-mileage trucks made in Detroit.
US carmakers have long criticized the split-assembly action by the importers as a tax dodge. The impact on US carmakers has been devastating even though the importers claim only 4 to 8 percent of the import pickup buyers thought about buying a larger, standard-sized pickup.
If the whopping tax rise stands, the Japanese truckmakers stand to lose thousands of truck sales in the US -- up to 40 percent, according to Toyota.
"With the huge increase brought on by the tariff, our truck sales will be reduced by about 40 percent," says Norman D. Lean, senior vice-president of Toyota Motor Sales, U.S.A., Inc., import subsidiary of the Japanese manufacturer.
The price of Toyota pickup trucks will go up about $800, according to Mr. Lean. Other Japanese importers put the increase at $1,000 or more.
The 25 percent tariff was imposed in 1963 as a retaliation against the European Economic Community which levied a high tax against US chicken exports to Europe.
At the time the Japanese lightweight pickups were unaffected as they were valued at less than $1,000.
"That was a punitive measure resulting from a European problem," asserts Mr. Lean. "It seems unfair and illogical to impose such a burden on the consumer and the thousands of retail auto dealers whose businesses depend significantly on the import truck market."
The whole issue could be moot, however, if the Carter administration acts on the tariff issue before the 90-day period expires Aug. 21, either confirming or reducing the 25 percent duty.