A considerable amount of the sticker price for a heavy tractor is composed of fees and taxes, and next week that will be going up.
President Donald Trump on Thursday announced on his Truth Social platform that, effective Wednesday, Oct. 1, the U.S. will levy 25% tariffs on all imported heavy-duty trucks.
All the major North American heavy-truck manufacturers are global companies with assembly operations in the U.S., but many supplement those plants with sister facilities in Mexico. Under the U.S.-Mexico-Canada (USMCA) free trade agreement—a deal Trump signed in 2018 that went into effect in 2020, replacing the North American Free Trade Agreement (NAFTA)—those trucks have generally been allowed into the U.S. tariff-free, but recent diplomatic history suggests that is about to change.
The White House did not respond to questions from CCJ about whether this new tariff will be levied on top of USMCA or if those trucks will remain exempt as long as 75% of the value in materials and labor is sourced from North America, and whether the new tariff includes parts, which were at issue in the Bureau of Industry and Security Section 232 National Security Investigation of Imports of Trucks earlier this year.
Jason Miller, Eli Broad Professor of Supply Chain Management at Michigan State University, said he was "very confident" the new tariff will override USMCA as the finished passenger vehicle tariffs now do. Mexico, the only country from which the U.S. imports finished on-highway heavy-duty trucks, accounted for 71.9% of heavy truck imports last year by dollar value, according to USA Trade Online.
Trump billed the new tariffs as one that protects truck makers "from the onslaught of outside interruptions" and one that supports truckers' financial health. However, in comments to the Security Section 232 investigation, much of the industry—including the American Trucking Associations, the Truckload Carriers Association, Daimler Truck North America (DTNA), International Motors, and Volvo Group—opposed them.
Given the lack of followup detail from the Trump administration since Thursday's announcement, International Motors, DTNA and Volvo Group told CCJ Friday the OEMs are now in a holding pattern.
