U.S. President Donald Trump has signed a new executive order that will hit medium- and heavy-duty truck imports with an additional 25 percent tariff effective November 1, though CUSMA-compliant vehicles are exempt. A 10 percent tariff will be placed on buses and motorcoaches. These tariffs have been justified under Section 232 of the Trade Expansion Act of 1962.
U.S. automakers were also offered additional relief from tariffs on auto parts, thanks to an extension of what was supposed to have been a short-term rebate until 2030. The rebate will also be offered to manufacturers of trucks and engines.
The amended action provides a rebate of 3.75 percent relative to the sales price of a domestically assembled vehicle, a figure that was arrived at by putting the 25 percent import tax on parts that make up 15 percent of a vehicle’s sales price. Multiplying those two percentages together is equal to 3.7 percent.
“President Trump is fortifying America’s ability to manufacture medium- and heavy-duty trucks and essential parts, which is vital for America’s military readiness, emergency response capabilities and critical infrastructure for economic activity,” the White House fact sheet said.
The American Trucking Association has voiced its opposition to the duties, saying it could drive up prices in an industry that is already being slammed by tariffs on steel and aluminum. It does not see the importation of heavy-duty trucks as a national security threat since the North American automobile industry is so deeply integrated that many of the trucks were already being made in the United States using imported parts.
