Duty Dodgers

Games little pickups play

It looks like a typical small pickup truck, but Japan's Subaru insists that the BRAT DL, a four-wheel-drive vehicle with an open cargo bed that it sells in the U.S. for $5,288, is really a "bi-drive recreational all-terrain transporter." The difference is important, at least to the manufacturer and U.S. Customs. By placing two seats in the BRAT'S cargo area, Subaru is able to import the machine as a car, on which the tariff is only 3%, rather than as a truck, on which the import tax is a far heftier 25%. Last year Subaru imported 22,945 of the BRATS.

Subaru is scarcely alone in using this loophole: not one of the 335,000 pickups imported last year was taxed at the full truck rate. The 25% levy, introduced by Congress in 1963 in retaliation for a European tax on American chickens, was originally designed to hit imports of the Volkswagen Transporter, which is no longer produced. Successive administrations have let the tariff go unenforced, and this is not likely to change, despite a General Accounting Office estimate that about $600 million in truck import taxes have been lost since 1971. Reason: U.S. automakers are playing the customs game alongside the Japanese.

Toyota and Datsun, which together brought in nearly 190,000 pickups last year, lead the duty dodgers. But Detroit's Big Three also find it cheaper to manufacture their smaller pickups in Japan and import them. Last year these "captive" imports included 70,557 Ford Couriers, 67,035 Chevy Luvs for GM and more than 3,000 Dodge D50s and Plymouth Arrows for Chrysler.

The most popular method of avoiding the 25% duty is to import trucks in two parts, in which case only a 4% tariff applies. After clearing customs, the chassis (including the cab) is joined to the cargo bed, a process that a Datsun spokesman concedes "can be performed in a matter of minutes." Toyota has a different stratagem: it builds the cargo beds in California and imports the cabs and chassis. The most ingenious ploy is GM's. Chevy Luvs are sent from Japan to Tacoma, Wash., with the chassis and bed loosely attached. The two parts are separated in a warehouse and, after being moved through customs on different days, rejoined. Darned crafty, those Detroiters.

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