President Donald Trump announced that all medium- and heavy-duty trucks imported into the United States will be subjected to a 25% tariff rate effective from November 1. This move is part of Trump’s initiative to safeguard U.S. companies against foreign competition.
Last month, Trump had indicated that heavy truck imports would face new duties starting from October 1 on grounds of national security. The imposed tariffs aim to shield manufacturers from unfair competition and provide advantages to companies like Paccar-owned Peterbilt and Kenworth, as well as Daimler Truck-owned Freightliner.
While trade agreements with Japan and the European Union have set 15% tariffs on light-duty vehicles, it remains uncertain if the same rate will apply to larger vehicles.
Additionally, the Trump administration has permitted manufacturers to offset the value of U.S. components from tariffs paid on light-duty vehicles manufactured in Canada and Mexico.
The affected larger vehicles encompass a wide range from delivery trucks, garbage trucks, public utility trucks, and school buses to tractor-trailer trucks, semi-trucks, and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce had previously advised the Commerce Department against imposing new truck tariffs, highlighting that the major import sources, including Mexico, Canada, Japan, Germany, and Finland, are allies or close partners of the United States and pose no threat to national security.
Mexico stands as the primary exporter of medium- and heavy-duty trucks to the United States. According to government data, imports of these larger vehicles from Mexico have tripled since 2019 to approximately 340,000.
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, including components like engines, axles, raw materials such as steel, or assembly labor.
The potential impact of tariffs extends to Chrysler-parent Stellantis, which manufactures heavy-duty Ram trucks and commercial vans in Mexico. Stellantis has been advocating against steep tariffs on its Mexican-made trucks.
Sweden’s Volvo Group is constructing a $700 million heavy-truck factory in Monterrey, Mexico, set to commence operations in 2026.
Mexico hosts 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 expressed opposition to the new tariffs, stating that Mexican trucks exported to the United States contain an average of 50% U.S. content, including diesel engines.
In the previous year, Mexico reported that the United States imported nearly $128 billion worth of heavy vehicle parts from Mexico, constituting around 28% of total U.S. imports.
