All medium and heavy-duty trucks imported into the United States will be subject to a 25% tariff starting from November 1, as announced by President Donald Trump. This move marks a significant escalation in efforts to shield U.S. companies from international competition.
President Trump had previously stated that heavy truck imports would be subjected to new duties as of October 1 on grounds of national security. The introduction of these tariffs aims to safeguard manufacturers from what is perceived as unfair foreign competition, benefiting companies like Peterbilt and Kenworth, owned by Paccar, as well as Freightliner, owned by Daimler Truck.
While trade agreements with Japan and the European Union entail 15% tariffs on light-duty vehicles, it remains uncertain if this rate will apply to larger vehicles. Moreover, the Trump administration has permitted producers to offset the value of U.S. components against tariffs paid on light-duty vehicles assembled in Canada and Mexico.
The range of larger vehicles impacted includes delivery trucks, garbage trucks, public utility trucks, transit and school buses, as well as tractor-trailer trucks, semi-trucks, and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce had advised the Commerce Department against imposing new truck tariffs, noting that Mexico, Canada, Japan, Germany, and Finland — the top five import sources — are all allies or close partners of the United States, posing no threat to national security.
Mexico, the leading exporter of medium and heavy-duty trucks to the U.S., has witnessed a significant surge in imports of these larger vehicles from around 2019 to approximately 340,000 today, as per government data released in January.
Under the Canada-U.S.-Mexico Free Trade Agreement (CUSMA), medium and heavy-duty trucks can move tariff-free if at least 64% of their value originates from North America, encompassing components like engines, axles, raw materials such as steel, and 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 actively lobbied against imposing high tariffs on its Mexican-produced trucks.
Sweden’s Volvo Group is currently constructing a $700 million heavy-truck factory in Monterrey, Mexico, slated 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 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 preceding year, the U.S. imported nearly $128 billion worth of heavy vehicle parts from Mexico, constituting approximately 28% of total U.S. imports, as per Mexico’s statement.
