Overview of the New Tariffs and Their Impact
President Donald Trump signed a proclamation on Friday imposing a 25% tariff on US imports of medium and heavy-duty trucks, as well as certain replacement parts. However, a discount system has been established for Mexico and Canada.
Additionally, a 10% tariff was authorized for the importation of buses, with no discounts granted to Mexico and Canada in this case.
Both tariffs will take effect on November 1st.
Tariff Details and Application
The proclamation specifies that for medium and heavy-duty trucks not eligible for preferential tariff treatment under the US-Mexico-Canada Agreement (T-MEC), the tariff will be applied to the total vehicle value.
For medium and heavy-duty trucks qualifying for preferential tariff treatment under the T-MEC, the tariff will only apply to the non-US value of the vehicle.
The tariff on medium and heavy-duty truck parts will focus on key components such as engines, transmissions, tires, and chassis.
Simultaneously, the US government has extended a program to alleviate tariff burdens on US automobile manufacturers importing parts with 25% tariffs.
Background and Context
In June, the Department of Commerce issued regulations outlining how manufacturers can request reductions on parts tariffs imposed under Section 232 of the Trade Expansion Act of 1962.
In the first seven months of 2025, the US imported trucks, buses, and special-purpose vehicles from around the world totaling $32.41 billion, marking a 15.4% decrease compared to the same period in 2024.
Mexico led these shipments, exporting $25.85 billion, which represents a year-over-year decline of 13.8%, according to Department of Commerce data.
Currently, the US imposes a 25% tariff on automobile imports from Mexico, with some exceptions.
Key Questions and Answers
- What is the purpose of these new tariffs? The tariffs aim to protect US automobile manufacturers by reducing imports of cheaper foreign trucks and encouraging domestic production.
- Which countries are affected by these tariffs? The tariffs primarily affect Mexico and Canada, with additional impacts on US businesses importing truck parts from abroad.
- What components of trucks are subject to the tariffs? Key components such as engines, transmissions, tires, and chassis are targeted by the tariffs.
- How do these tariffs impact Mexican exports? The tariffs have led to a 13.8% year-over-year decline in Mexican truck exports to the US, totaling $25.85 billion in the first seven months of 2025.
- What is the discount system for Mexico and Canada? The discount system allows Mexican and Canadian truck producers to claim a 3.75% credit on the suggested retail price of US-assembled vehicles up to 2030, offsetting import tariffs on parts.
