Economy|Donald TrumpTrump announces 25 percent tariffs on medium and heavy imported trucksLast month, US President Donald Trump had said he would introduce new tariffs to protect the manufacture of medium- and heavy-duty trucks from outside competition.

Regulation: Tariff Changes on Imported Trucks

Effective Wed, Nov 1, 2023, the United States will implement a 25% tariff on all medium- and heavy-duty trucks imported into the country. This measure is part of a broader strategy to protect domestic manufacturers from international competition.

Previously, tariffs on heavy truck imports were announced for Sun, Oct 1, 2023, based on national security considerations. The aim is to shield manufacturers from external competition, with anticipated benefits for companies such as Paccar's Peterbilt and Kenworth, as well as Daimler Truck's Freightliner.

Under existing trade agreements with Japan and the European Union, the United States applies a 15% tariff on light-duty vehicles. However, it remains uncertain if this rate will extend to larger vehicles. Additionally, manufacturers can deduct the value of U.S. components from tariffs applied on light-duty vehicles assembled in Canada and Mexico.

Delivery trucks Garbage trucks Public utility vehicles Buses for transit, shuttles, and schools Tractor-trailer trucks Semi-trucks Heavy-duty vocational vehicles

The U.S. Chamber of Commerce has advised against imposing new truck tariffs, highlighting that primary import partners such as Mexico, Canada, Japan, Germany, and Finland do not pose a threat to U.S. national security. Mexico remains the largest exporter of medium- and heavy-duty trucks to the United States, with imports tripling since 2019 to approximately 340,000 units.

Under the United States-Mexico-Canada Agreement (USMCA), medium- and heavy-duty trucks are exempt from tariffs if at least 64% of their value originates in North America, including components such as engines, axles, steel, and labor.

Potentially affected companies include Stellantis, which manufactures heavy-duty Ram trucks and commercial vans in Mexico, and Volvo Group, currently constructing a $700 million heavy-truck factory in Monterrey, Mexico, slated to commence operations in 2026.

Mexico has expressed opposition to the tariffs, citing that Mexican-exported trucks to the U.S. contain on average 50% U.S. content, such as diesel engines. In the previous year, the U.S. imported nearly $128 billion in heavy vehicle parts from Mexico, representing about 28% of total U.S. imports.

Based on reporting by Al Jazeera.