All medium and heavy-duty trucks imported into the United States will be subject to a 25 percent tariff rate starting from November 1, according to an announcement by President Donald Trump. This move represents a significant escalation in efforts to shield U.S. companies from foreign competition.
President Trump had previously indicated that heavy truck imports would face additional duties from October 1 on the basis of national security concerns. The aim of these new tariffs is to safeguard manufacturers from what is perceived as unfair competition from abroad, benefiting companies like Paccar-owned Peterbilt and Kenworth, as well as Daimler Truck-owned Freightliner.
While trade agreements with Japan and the European Union have led to a 15 percent tariff on light-duty vehicles, the situation regarding larger vehicles remains uncertain in terms of tariff rates.
Furthermore, the Trump administration has permitted producers to offset the value of U.S. components against tariffs paid on light-duty vehicles manufactured in Canada and Mexico.
The category of larger vehicles encompasses a wide range 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 Mexico, Canada, Japan, Germany, and Finland are the top five import sources, all of which are allies or close partners of the United States and do not pose a national security threat.
Mexico serves as the largest exporter of medium and heavy-duty trucks to the United States, with imports of these vehicles from Mexico having tripled since 2019 to approximately 340,000, according to government data released in January.
Under the Canada-U.S.-Mexico free trade agreement (CUSMA), medium and heavy-duty trucks are exempt from tariffs if at least 64 percent of the truck’s value originates in North America, whether through parts like engines and axles, raw materials such as steel, or assembly labor.
The potential impact of tariffs extends to Stellantis, the parent company of Chrysler, which manufactures heavy-duty Ram trucks and commercial vans in Mexico. Stellantis has been actively lobbying against steep tariffs on its Mexican-made trucks.
Additionally, Sweden’s Volvo Group is constructing a $700 million heavy-truck factory in Monterrey, Mexico, slated to commence operations in 2026.
Mexico houses 14 manufacturers and assemblers of buses, trucks, and tractor trucks, along with two engine manufacturers, as reported by the U.S. International Trade Administration.
Mexico has expressed opposition to the new tariffs, stating that on average, all Mexican trucks exported to the U.S. contain 50 percent U.S. content, including diesel engines.
In the previous year, the United States imported nearly $128 billion worth of heavy vehicle parts from Mexico, accounting for roughly 28 percent of total U.S. imports, according to Mexico.