Good news! Just when you thought we put this whole tariff thing behind us, President Trump decided to throw everyone another curveball. Now, all medium- and heavy-duty trucks imported to the U.S. will face a 25% duty starting on November 1. This represents a significant escalation of his efforts to insulate U.S. companies from foreign competition.Â
In September, Trump said heavy-duty truck (meaning semis, 18-wheelers, tractor-trailers, etc.) imports would face new duties on October 1 based on national security grounds. He said the new tariffs would protect U.S.-based manufacturers from “unfair outside competition” and that the move would benefit companies like Peterbilt, Kenworth, Mack and Freightliner (even if truck-makers themselves disagreed). From Reuters:
Under trade deals reached with Japan and the European Union, the United States has agreed to 15% tariffs on light-duty vehicles but it is not clear if they will face that rate for larger vehicles.
The Trump administration has also allowed producers to deduct the value of U.S. components from tariffs paid on light-duty vehicles assembled in Canada and Mexico.
Larger vehicles include everything from delivery trucks, garbage trucks, public utility trucks, transit, shuttle, and school buses and tractor-trailer trucks as well as semi-trucks and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce earlier urged the Commerce Department not to impose new truck tariffs, noting the top five import sources are Mexico, Canada, Japan, Germany, and Finland “all of which are allies or close partners of the United States posing no threat to U.S. national security.”
As it stands, Mexico is the largest exporter of medium- and heavy-duty trucks to the U.S. Apparently, imports of those types of trucks have tripled since 2019 to around 340,000 units today.
Under the North American free trade deal USMCA, medium- and heavy-duty trucks move tariffs free if at least 64% of a heavy truck’s value originates in North America, via parts like engines and axles, raw materials such as steel, or assembly labor.
Tariffs could also affect Chrysler-parent Stellantis which produces heavy-duty Ram trucks and commercial vans in Mexico. Stellantis had been lobbying the White House not to impose steep tariffs on its Mexican-made trucks.
Sweden’s Volvo Group is building a $700 million heavy-truck factory in Monterrey, Mexico, due to start operations in 2026.
Mexico is currently home to 14 manufacturers and assemblers of buses, trucks, and 18-wheelers. It’s also got two engine manufacturers, according to Reuters. Obviously, the country opposes the new tariffs, telling the U.S. Commerce Department in May that all Mexican-made trucks exported to the U.S. have, on average, 50% U.S. content, including diesel engines.
