U.S. President Donald Trump has issued an executive order imposing a 25% tariff on medium- and heavy-duty trucks imported into the country, effective November 1. The tariff excludes vehicles traded under the Canada-U.S.-Mexico Agreement.
Additionally, Trump has announced extended relief for U.S. automakers from tariffs on auto parts until 2030. The revised action entails a 3.75% rebate based on the sales price of domestically assembled vehicles, calculated by applying a 25% import tax to parts constituting 15% of a vehicle’s price.
The rebate will now encompass manufacturers of trucks and engines as well. Trucks compliant with the CUSMA will only face tariffs on non-American parts, while the recent levies will not impact auto parts complying with the North American trade pact at present.
Furthermore, a 10% tariff will be imposed on buses and motorcoaches. Trump had previously threatened these heavy truck levies to safeguard American industry from external competition.
The White House stated that Trump’s actions aim to strengthen the manufacturing capabilities of medium- and heavy-duty trucks and critical parts, essential for military readiness, emergency response, and economic infrastructure.
Despite this, the American Trucking Association has criticized the tariffs, expressing concerns about potential price increases in an industry already grappling with steel and aluminum tariffs. The association highlighted the thin profit margins and ongoing challenges faced by the trucking sector.
The North American automobile industry, deeply interconnected, already manufactures many trucks in the U.S. using components from various countries. While the impact of the tariffs may be more significant in Mexico, some heavy- and medium-duty vehicle companies have operations in Canada, such as Paccar, which had layoffs at its Quebec plant in August.
