Jump to content
Get the Cheers & Gears App! ×
Create New...

Ford News: Vanishing Van, is it Passenger or Cargo?


Recommended Posts

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if the U.S. and China come to terms for a new trade agreement, there are no promises that the in place tariffs would be repealed.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: 


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.

View full article

Link to comment
Share on other sites

The chicken tax is really stupid.  Better to tax all autos the same or not.  I normally hate tariffs, but different tariffs on different kinds of trucks make matters worse.  This article is a perfect illustration of the problem with different tariffs on very similar vehicles.

  • Agree 2
Link to comment
Share on other sites

58 minutes ago, Drew Dowdell said:

It's possible that Ford could get smacked back.... we'll see. 

Yes current administration seems to have a lot of wrath at Ford right now.

Link to comment
Share on other sites

Join the conversation

You are posting as a guest. 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.

Reply to this topic...

×   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.

  • Who's Online   2 Members, 0 Anonymous, 36 Guests (See full list)

  • Mazda unveils the Iconic SP concept

    At the 2023 Tokyo auto show, Mazda unveiled a sports car concept. Originally named Vision Study Model, the Iconic SP, utilizes an interesting engine combination. This hybrid-rotary-powered sports car uses the twin-rotor rotary engine as a generator to recharge the batteries. Iconic SP is around 10 inches longer than Mazda’s compact Miata. Although Mazda hasn't disclosed the number of electric motors, they are the main propulsion system. As a range-extending EV, that rotary engine doesn’t dr


    Mazda CX-70 Delayed Until 2024

    Since the introduction of the Mazda CX-90, a smaller SUV has been in the pipeline. The CX-70 was supposed to go on sale at the end of this year but has been delayed until 2024. Mazda is aiming to offer more SUVs for American customers.  This means that the CX-70 will compete alongside the CX-90 is the mid-size SUV segment.  Europe already has the CX-60, and Mazda said the CX-70 is essentially the same with a wider body. CX-70 will have a shorter wheelbase than the CX-90 due to it being a tw


    EPA Has Announced the Range for the 2024 Kia EV9

    The EPA has announced the various electric ranges of the Kia EV9. This new crossover SUV is Kia's flagship SUV, with various battery sizes and ranges. Kia gave the EV9 five trim levels along with two battery sizes. At the bottom of the EV9 lineup is the $56,000 Light rear-wheel-drive Light trim level. An EV9 Light utilizes a 76.1-kWh battery, good for 215 horsepower/160 kW and 258 ft-lb /339 Nm. The range for the Light rear-wheel-drive is 230 miles, or about 3.0 miles/kWh. The Light trim le


  • Create New...

Hey there, we notice 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.


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