Key Takeaways
President Trump placed a 25% tariff on imported medium- and heavy-duty trucks, starting November 1, to protect U.S. manufacturers.
The tariff is expected to raise the price of new imported trucks by tens of thousands of dollars.
The top five exporters of medium- and heavy-duty trucks to the United States are Mexico, Canada, Japan, Germany, and Finland.
Because the United States gets most of its heavy truck imports from Mexico (78%) and Canada (15%), the value of the tariff on these vehicles will be affected by the U.S.-Mexico-Canada free trade agreement.
While light-duty vehicles are subject to 15% tariffs under existing trade agreements with Japan and the European Union, it is unclear how larger vehicles will be treated under these agreements.
President Trump placed a 25% tariff on all medium and heavy-duty trucks imported into the United States starting on November 1. According to Newsweek, the duties were originally slated to begin on October 1, but were delayed due to concerns from major U.S. automakers about supply chain disruptions and cost increases. Importers and fleet operators anticipate the tariff will raise the price of new trucks by tens of thousands of dollars. Via Reuters, larger vehicles include delivery trucks, garbage trucks, public utility trucks, tractor-trailer trucks, transit, shuttle, and school buses, as well as semi-trucks and heavy-duty vocational vehicles.
According to Newsweek, the U.S. Commerce Department launched an investigation in April under Section 232 of the Trade Expansion Act into imports of medium- and heavy-duty trucks weighing over 10,000 pounds, along with their parts. The probe acknowledges that a small number of foreign suppliers, which supply most U.S. imports, are accused of engaging in “predatory trade practices.” Under the Trade Expansion Act, the federal government may impose import tariffs on products deemed essential to national security.
President Trump wants to protect manufacturers from “unfair outside competition,” which would benefit companies such as Paccar-owned Peterbilt and Kenworth, and Daimler Trucks-owned Freightliner. The U.S. trucking industry moves nearly three-quarters of the nation’s domestic freight, employing more than two million heavy and tractor-trailer truck drivers and many more working in supplemental roles, such as vehicle maintenance, logistics, and warehousing. The top five exporters of medium- and heavy-duty trucks to the U.S. are Mexico, Canada, Japan, Germany, and Finland.
The U.S. gets 78% of heavy truck imports from Mexico and 15% from Canada. Imports from Mexico tripled since 2019 to around 340,000 today. The impact of the tariffs on heavy trucks made in Mexico and Canada will depend on exemptions for products compliant with the U.S.-Mexico-Canada free trade agreement (USMCA). Under the USMCA, medium- and heavy-duty trucks move tariffs free if at least 64% of a heavy truck’s value — which, according to Reuters, includes parts like engines and axles, raw materials such as steel, or assembly labor — originates in North America. The 64% will increase to 70% in future years. Via FreightWaves, the USMCA also mandates that key components such as engines, axles, and transmissions contain at least 75% North American content, and that manufacturers source 70% of their steel and aluminum domestically.
Mexico hosts 14 manufacturers and assemblers of buses, trucks, and tractor trucks, and two manufacturers of engines. According to Mexican officials, Mexican trucks exported to the U.S. have, on average, 50% U.S. content, including diesel engines. In 2024, Mexico exported a total of 159,466 heavy-duty trucks, of which 95.5% went to the U.S. In 2024, the U.S. imported almost $128 billion in heavy vehicle parts from Mexico, accounting for approximately 28% of total U.S. imports.
According to CBTNews, under existing trade agreements with Japan and the European Union, light-duty vehicles are subject to 15% tariffs, but it is unclear how larger vehicles will be treated under these agreements. The Trump administration has also allowed producers to deduct the value of U.S. components from tariffs on light-duty vehicles assembled in Canada and Mexico.
As reported by Newsweek, Stellantis NV is lobbying for an exemption from the 25% tariff for its Mexican-built Ram pickups, but Bloomberg reports that competitors, such as Ford Motor Co., want the administration to deny that relief because granting any waiver would give Stellantis an unfair cost advantage and trigger similar demands across the industry. In 2024, Stellantis produced 206,962 Ram 2500 and 3500 medium-duty trucks in Saltillo, Mexico; Ford built nearly 400,000 Super Duty pickups at U.S. plants, and GM assembled about 266,000 medium-duty trucks domestically.
Heavy-duty truck sales have been slow for most of the year. As of August, Class 8 truck orders (33,001 pounds or more) were down about 24% year over year compared to the same month in 2024. This class primarily includes semi-trucks, large dump trucks, and concrete mixers, along with most over-the-road freight haulers.
Analysis
Tariffs on medium- and heavy-duty trucks are being sold as essential for national security, but they will actually make the U.S. less secure by raising costs for the American trucking industry, which could cause shipping disruptions for essential products. Given the already existing strict North American content standards for trucks coming from Mexico and Canada, representing 93% of heavy truck imports, this tariff may have a minimal impact on trade if most trucks are exempted due to compliance with the USMCA. However, if there is no exemption, then it would raise costs significantly and further worsen trade relations with the U.S.’s two largest trading partners.
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