All large and medium trucks brought into the U.S. will be subjected to a 25% tariff starting November 1, as announced by President Donald Trump. This move is part of Trump’s strategy to safeguard American companies against international competition.
In a statement made last month, Trump indicated that heavy truck imports would be subject to additional duties starting October 1, citing national security concerns. The purpose of these new tariffs is to shield manufacturers from unfair competition and provide advantages to companies like Peterbilt and Kenworth under Paccar, as well as Freightliner under Daimler Truck.
While trade agreements with Japan and the European Union have established 15% tariffs on light-duty vehicles, it remains uncertain if this rate will apply to larger vehicles.
Furthermore, the Trump administration has permitted manufacturers to offset the value of American components against tariffs paid on light-duty vehicles produced in Canada and Mexico.
The category of larger vehicles encompasses a wide range, including delivery trucks, garbage trucks, public utility vehicles, transit and school buses, tractor-trailer trucks, semi-trucks, and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce had previously advised against imposing new tariffs on trucks, emphasizing that the primary sources of imports are Mexico, Canada, Japan, Germany, and Finland – all considered allies or close partners of the United States and not posing a national security threat.
Mexico stands as the largest exporter of medium and heavy-duty trucks to the U.S. A recent report indicated that imports of these larger vehicles from Mexico have tripled since 2019, reaching around 340,000 units currently, as per government data.
Under the Canada-U.S.-Mexico free trade agreement (CUSMA), medium and heavy trucks are exempt from tariffs if at least 64% of the vehicle’s value originates from North America, which can include components like engines, axles, raw materials such as steel, or labor during assembly.
Potential implications of the tariffs extend to Stellantis, the parent company of Chrysler, which manufactures heavy-duty Ram trucks and commercial vans in Mexico. Stellantis has been advocating against imposing high tariffs on its trucks manufactured in Mexico.
In other developments, Volvo Group from Sweden is constructing a $700 million heavy-truck plant in Monterrey, Mexico, scheduled to commence operations in 2026.
Mexico hosts 14 manufacturers and assemblers of buses, trucks, tractor trucks, and two engine manufacturers, according to the U.S. International Trade Administration. Mexico has opposed 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 close to $128 billion worth of heavy vehicle parts from Mexico, constituting roughly 28% of total U.S. imports, as reported by Mexico.
