All medium and heavy-duty trucks imported into the United States will be subject to a 25% tariff rate beginning on November 1, as announced by President Donald Trump. This move represents a significant escalation in the administration’s efforts to safeguard U.S. companies from foreign competition.
Last month, President Trump indicated that heavy truck imports would incur new duties effective October 1, citing national security concerns. The rationale behind the imposition of these tariffs is to shield manufacturers from what is perceived as unfair competition from abroad. The President highlighted that this action would particularly benefit companies such as Paccar-owned Peterbilt and Kenworth, as well as Daimler Truck-owned Freightliner.
While trade agreements with Japan and the European Union have established 15% tariffs on light-duty vehicles, it remains unclear whether this rate will apply to larger vehicles. The Trump administration has granted producers the ability to offset the value of U.S. components from tariffs paid on light-duty vehicles manufactured in Canada and Mexico.
The category of larger vehicles subject to the newly announced tariffs encompasses a wide range of vehicles, including delivery trucks, garbage trucks, public utility trucks, transit and school buses, tractor-trailer trucks, semi-trucks, and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce had previously advised against the imposition of new truck tariffs, pointing out that the top five import sources—Mexico, Canada, Japan, Germany, and Finland—are allies or close partners of the United States and do not pose a national security threat.
Mexico stands out as the leading exporter of medium and heavy-duty trucks to the U.S. According to a study released in January, imports of these larger vehicles from Mexico have tripled since 2019, reaching approximately 340,000 units today.
Under the Canada-U.S.-Mexico free trade agreement (CUSMA), medium and heavy-duty trucks are exempt from tariffs if at least 64% of the truck’s value originates in North America, through components like engines, axles, raw materials such as steel, or assembly labor.
The tariffs could impact Stellantis, the parent company of Chrysler, which manufactures heavy-duty Ram trucks and commercial vans in Mexico. Stellantis had been actively lobbying against the imposition of steep tariffs on its Mexican-made vehicles.
Sweden’s Volvo Group is undertaking the construction of a $700 million heavy-truck factory in Monterrey, Mexico, set to commence operations in 2026.
Mexico is home to 14 manufacturers and assemblers of buses, trucks, and tractor trucks, along with two engine manufacturers, according to the U.S. International Trade Administration. Mexico has voiced its opposition to the new tariffs, emphasizing that Mexican trucks exported to the U.S. contain an average of 50% U.S. content, including diesel engines.
In the previous year, the U.S. imported nearly $128 billion worth of heavy vehicle parts from Mexico, constituting around 28% of the total U.S. imports in this category.
