By David Shepardson
WASHINGTON (Reuters) -President Donald Trump said Monday that all medium- and heavy-duty trucks imported into the United States will face a 25% tariff rate starting November 1, a significant escalation of his effort to protect U.S. companies from foreign competition.
Trump last month had said heavy truck imports would face new duties on Oct. 1 on national security grounds, saying the new tariffs were to protect manufacturers from “unfair outside competition” and that the move would benefit companies such as Paccar-owned Peterbilt and Kenworth and Daimler Truck-owned Freightliner.
Under trade deals reached with Japan and the European Union, the United States has agreed to 15% tariffs on light-duty vehicles but it is not clear if they will face that rate for larger vehicles.
The Trump administration has also allowed producers to deduct the value of U.S. components from tariffs paid on light-duty vehicles assembled in Canada and Mexico.
Larger vehicles include everything from delivery trucks, garbage trucks, public utility trucks, transit, shuttle, and school buses and tractor-trailer trucks as well as semi-trucks and heavy-duty vocational vehicles.
The U.S. Chamber of Commerce earlier urged the Commerce Department not to impose new truck tariffs, noting the top five import sources are Mexico, Canada, Japan, Germany, and Finland “all of which are allies or close partners of the United States posing no threat to U.S. national security.”
Mexico is the largest exporter of medium- and heavy-duty trucks to the United States. A study released in January said imports of those larger vehicles from Mexico have tripled since 2019 to around 340,000 today, according to government statistics.
Under the North American free trade deal USMCA, medium- and heavy-duty trucks move tariffs free if at least 64% of a heavy truck’s value originates in North America, via parts like engines and axles, raw materials such as steel, or assembly labor.
Tariffs could also affect Chrysler-parent Stellantis which produces heavy-duty Ram trucks and commercial vans in Mexico. Stellantis had been lobbying the White House not to impose steep tariffs on its Mexican-made trucks.
Sweden’s Volvo Group is building a $700 million heavy-truck factory in Monterrey, Mexico, due to start operations in 2026.
Mexico is home to 14 manufacturers and assemblers of buses, trucks, and tractor trucks, and two manufacturers of engines, according to the U.S. International Trade Administration.
Mexico opposed new tariffs, telling the Commerce Department in May that all Mexican trucks exported to the United States have on average 50% U.S. content, including diesel engines.
Last year, the United States imported almost $128 billion in heavy vehicle parts from Mexico, accounting for approximately 28% of total U.S. imports, Mexico said.
(Reporting by David Shepardson, Christian Martinez and Susan Heavey; editing by Costas Pitas and Chizu Nomiyama )
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