Few policy debates capture the unintended longevity of protectionism quite like the “chicken tariff.” In 1964, amid a trade dispute over European tariffs on American poultry, President Lyndon B. Johnson imposed a 25 per cent duty on imported light trucks — a measure intended as tit-for-tat against foreign trade barriers on U.S. chicken. Today, as the U.S. and Canada could potentially exchange 25 per cent tariffs on each other’s goods, the story of the chicken tariff offers both a cautionary tale and a roadmap for what we might expect in this modern showdown.

The origin of the chicken tariff was anything but intuitive. In the early 1960s, American chicken had become inexpensive and popular in West Germany (the biggest market for the U.S.) and other European countries, provoking European nations to impose steep tariffs and other restrictions to protect their own domestic industries. This increased prices for chicken in European countries. In response, the U.S. — seeking both retribution and to shield its domestic automakers from growing foreign competition — slapped a 25 per cent tariff on light trucks, significantly reducing sales. Although the original retaliatory measures also covered items like potato starch, dextrin, and brandy, only the light truck tariff endured over time.

Fast forward to the present: last week, in a renewed climate of trade tension, the U.S. imposed a 25 per cent  tariff — this time on imports from Canada — while Canada retaliated in kind with its own 25 per cent counter-tariff. Though a last-minute effort has since delayed the tariff war, at first glance, the symmetry is striking given the anticipated repercussions.

The chicken tariff reminds us that such tariffs often have effects far beyond their initial intent, often benefiting few industries while hurting consumers, overall business, and workers as employment declines in cost-cutting efforts. This means in some situations, tariffs lead to a net negative. Consider, for example, the tariffs Trump imposed on imports in 2018. The net negative effect was although it created jobs and brought in $82 million USD annually to the U.S. government, it has costed consumers $1.5 billion USD annually. 

One key lesson from the chicken tariff is that once protectionist measures are in place, they tend to persist, even as the original disputes fade into history. Foreign companies, faced with such barriers, have often resorted to “tariff engineering” — modifying product designs or production strategies to evade the duty. These workarounds add complexity to global supply chains and undermine the intention of tariffs and serve as an unintended consequence offloaded to consumers.

The chicken tariff’s legacy teaches us that the short-term political benefits of protecting domestic jobs and industries must be weighed against the long-term costs of reduced market efficiency and higher prices for consumers. This is particularly important because unlike the 1964 trade relationship between the U.S., West Germany, and Europe, the economies of Canada and the U.S. are deeply interwoven, likely exasperating harmful effects. So, for the U.S. and Canada, a mutual imposition of 25% tariffs risks a protracted trade conflict that ultimately harms both economies. Manufacturers may find themselves caught between protection and the imperative to innovate, while consumers face fewer choices and higher costs.

Moreover, just as the chicken tariff inadvertently cemented a competitive advantage for American automakers, today’s tariffs may inadvertently stifle broader economic dynamism. Instead of encouraging a robust reallocation of resources to more efficient, innovative sectors, such measures may lead to market distortions that persist for decades.

History does not necessarily dictate our future, but it offers valuable insights. As policymakers navigate the current U.S.-Canada tariff dispute, the enduring lesson of the chicken tariff should serve as a warning: protectionist measures can easily become permanent, locking in benefits for certain industries at the expense of overall economic efficiency. A willingness to engage in dialogue, seek negotiated settlements, and eventually remove or adjust such tariffs may ultimately serve both nations better than a sustained trade war. That is, if Trump desires to be a willing participant.

In reflecting on the past, we are reminded that trade policies are not static. The challenge for both the U.S. and Canada is to craft a balanced approach — one that protects vital industries without sacrificing the competitive forces that drive innovation and consumer choice. Only then can we hope to avoid the unintended legacy of a policy that, much like the humble chicken tariff of 1964, might otherwise cluck on far longer than anyone intended.