Jump to content
Create New...
  • 💬 Join the Conversation

    CnG Logo SQ 2023 RedBlue FavIcon300w.png
    Since 2001, Cheers & Gears has been the go-to hub for automotive enthusiasts. Join today to access our vibrant forums, upload your vehicle to the Garage, and connect with fellow gearheads around the world.

     

  • G. David Felt
    G. David Felt

    Vanishing Van, is it Passenger or Cargo?

      Obscure Legal question could decide the fate of Ford's small vans in America.

    In the latest round of Trade War rhetoric is a question that has ended up in the courts, when is a passenger van really a cargo van and does this tariff engineering really justify getting around the 25% chicken tax?

    In response to President Donald Trump's tariff war, automakers are find interesting ways to play the grey area of the legal system. According to BNN Bloombergford_transit-connect_cargo-minivan_cargo-van-xlt.jpg and Bloomberg news, trade attorneys are closely watching the Ford Motor Co. legal case play out in federal court. This case deals with the importation of passenger vans that are then stripped down once they clear customs and sold as cargo vans. The difference here is that Ford pays 2.5% import duty on passenger vans versus te 25% import duty on light trucks / cargo vans. This challenge against Ford brought by U.S. Customs is challenging the practice of tariff engineering. The art of building a product one way, then changing it once cleared by customs for another use. With all the increased tariffs imposed by the Trump administration this could have critical impact on a region that many automakers have used to bring in a profitable product for market needs. 

    According to the news stories, a ruling by the Court of International Trade ruled in Ford's favor in 2017 but is being challenged by the administration in the U.S. Court of Appeals. Regardless if the U.S. and China come to terms for a new trade agreement, there are no promises that the in place tariffs would be repealed. Ford's argument is that tariff engineering is a legitimate maneuvers for firms exploring ways to mitigate duties by project reclassification, shifting production to other countries which changes the origins of product assembly.

    Trade lawyers across the country say this case will help establish legal guidelines for tariff engineering. To quote the story from BNN Bloomberg: 

    Quote

    A decade ago, Ford began importing Transit Connect vans made in Turkey that were classified as passenger vehicles. After the vans cleared customs but before they left port, a subcontractor removed a second row of seats and made other changes to sell them as cargo vans, according to court filings. Had they been classified as trucks, the duty would have been 25 percent, a levy known as the “chicken tax” because it was imposed in the 1960s when the U.S. retaliated against Europe for slapping duties on American chicken.

    The U.S. Court of International Trade has stated that under the well-established customs law, manufacturers can intentionally make a product that can avoid higher tariffs with simple changes. What cannot be done is situations such as hiding a higher quality product in a lower quality product like high grade tobacco inside a case of lower grade tobacco. This case has come down to the wording on the import paperwork of "principally designed for the transport of persons". The current administration says this is a scheme for avoiding taxes and local jobs. Ford argues that the goods must be classified in their condition as imported, regardless of later alterations and ended use by consumers.

    Appeals court is expected to rule in the coming weeks.


    User Feedback

    Recommended Comments

    There are no comments to display.



    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.




  • Support Real Automotive Journalism

    Cheers and Gears Logo

    Since 2001, Cheers & Gears has delivered real content and honest opinions — not emotionless AI output or manufacturer-filtered fluff.

    If you value independent voices and authentic reviews, consider subscribing. Plans start at just $2.25/month, and paid members enjoy an ad-light experience.*

    You can view subscription options here.

    *a very limited number of ads contain special coupon deals for our members and will show

  • Similar Content

  • Posts

    • Its simple capitalism.   More precisely to say though...its GREED. And because this is happening in the US in 2025, and to be fair it is reciprocated here in Canada, and this phenomenon has been in effect since the 1980s, its CORPORATE GREED since both of our countries have made ourselves servants and lackeys  to these corporations. We abide by everything they tell us through their shytty adverts. We have stopped patronizing mom and pop shops etc...   And when Trump was tooting tariffs as his election campaign, the democrats warned of such dangers about corporate greed...about how tariffs work (the citizen pays the tariff and not the country as its a fancy word for tax and how corporations will augment the un-tariffed product to be closer in sales price as the tariffed product...  But, Harris and her party were all doom sayers.   And she has a weird laugh on top of that.  And the talk went on to be about how they are eating the dogs and they are eating the cats...     Basic education is terrible in the US.  And its by design as a certain political party in the US (and Canada to be fair but the tactic is less successful as Canadians are more community oriented)  defunds education every time they go into power. Its also by design that in today's world, the two most northern countries in North America choose to glorify ignorance and vilify knowledge and education. To a lesser extent up here in Canada for whatever reason.  Canadians in general continue to value enlightenment.     Critical thinking skills be shrinking in the US of A.   Liittle catchy slogans is what grabs attention though.  They are eating the dogs and eating the cats.  We did have something similar in Canada though.  Trudeau has nice hair was our cat/dog moment 10 or so years ago.  But Trudeau won.  And if it wasnt for Doge, Musk, tariffs, Epstein, 51st state rethoric, 36 counts of felonies, we too, be having our Maple Maga movement.  But...education is a priority up here in Canada still...      
    • AGREE!!! Dating myself, but back in the late 70's/early 80's I worked at the cinema and was the snack bar shift lead. One of the basic tests to get a position and make more money was those that worked the snack bar had to be able to do basic math in their head. I would daily have to test them by placing random order of products and they had to add it up in their head and then based on the cash received give back proper change but a requirement here in Washington state was to count it back so as a simple example. You order up $13.50 in food, give them a $20 dollar bill and they would have to count it back as food, $13.50, two quarters make it $14, a one makes it $15 and a five makes it $20 so they know they got the correct change. Today, go to any store and most struggle to look at the screen and figure out the proper change to give back and then they just hand you a pile of coin and paper without counting it back to ensure it is proper.  Basic math in America is terrible.
    • Yep. We're already not in a great place because of the tariffs, but companies are absolutely taking advantage of that and charging so much more than the tariff itself and then claiming it's raised because of tariffs. It's as if they don't think people understand how to do math.  Then again, in all fairness, most people don't know how to do simple math. So, there is that.
    • Agree with 15% on items from Ireland, it is crazy the price gouging that is going on. Retail grocery stores are even worse I see for items like Kerrygold butter.
  • Who's Online (See full list)

    • There are no registered users currently online
  • My Clubs

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.

Hey there, we noticed you're using an ad-blocker. We're a small site that is supported by ads or subscriptions. We rely on these to pay for server costs and vehicle reviews.  Please consider whitelisting us in your ad-blocker, or if you really like what you see, you can pick up one of our subscriptions for just $1.75 a month or $15 a year. It may not seem like a lot, but it goes a long way to help support real, honest content, that isn't generated by an AI bot.

See you out there.

Drew
Editor-in-Chief

Write what you are looking for and press enter or click the search icon to begin your search