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The United States will impose new tariffs on heavy trucks, medium trucks and buses starting November 1, according to an executive order signed by President Donald Trump on Friday.
The import of medium and heavy trucks includes 25% duty per order. Meanwhile, buses will face 10% tolls. The tariffs do not overlap with previously enacted sectoral tariffs, nor do they stack with country-specific tariffs, according to a White House fact sheet.
Truck and bus tariffs apply to a broad list of Class 3 to Class 8 vehicles used in commercial and passenger transportation, such as school buses, transit buses, motor buses, large pickup trucks, dump trucks, cargo trucks, and eighteen-wheeler tractors, respectively. Tariffs apply to parts related to engines, transmissions, tires, chassis and other key components used to assemble medium and heavy vehicles.
The White House justified the move as a national security concern, stressing in the executive order that many Class 4 through 8 vehicles sold in the United States are imported, but that such vehicles are essential for moving people and goods, including military products, in critical scenarios.
beyond crisis scenarios, [medium- and heavy-duty vehicles] The executive order states that they are essential to sustaining America’s critical infrastructure and economic stability and carry more than 70 percent of the nation’s cargo weight, including essential goods such as food, fuel and medical equipment.
However, the White House also created a path for companies to offset some of the tariffs if the products qualify under certain free trade agreements or US rules of origin.
For heavy trucks that qualify for treatment under the US-Mexico-Canada Agreement, importers can apply for a 25 percent tariff on non-US content only. The Department of Commerce will determine which importers are eligible. The order also requires the agency to establish a similar process for importing medium-duty trucks. Meanwhile, USMCA-compliant medium-duty trucks will not receive a new tariff.
Under the order, manufacturers of heavy-duty trucks that perform final assembly in the United States can apply to offset 3.75 percent of annual tariff costs for five years from the date the tariffs are implemented.
In addition, due to the large overlap between passenger vehicle and truck and bus supply chains, Trump also extended the period in which automakers are eligible to reduce their tariffs by five years. For vehicles assembled in the United States, such importers can receive a 3.75% annual duty offset until April 30, 2030. The Commerce Department should also establish a similar process for engine manufacturers for trucks and cars based on the order.
In addition to those compensatory adjustments, the order authorizes the Commerce Department to cut in half the current 50 percent steel and aluminum tariffs on companies operating in Canada or Mexico that supply goods to U.S. auto and truck manufacturers.
“Rate adjustments shall also be limited to imports of aluminum and steel that qualify for a preferential tariff under the USMCA and are melted, cast, or melted and cast in Canada or Mexico,” the order said.
Friday’s order, which Trump promised earlier this month to increase tariffs, follows a Section 232 investigation that the White House launched earlier this year. Such research has reported other sector-specific complications, such as furniture and timber imports.
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