Trump Extends Auto Relief Imposes 25% Truck Tariff

US President Donald Trump signed a significant trade order on Friday, extending tariff relief for automakers while imposing new duties on imported medium and heavy-duty trucks and parts. The White House released the details, confirming that the new 25% tariff on imported trucks and their components will come into effect from November 1. This order reflects the Trump administration’s continued focus on protecting domestic manufacturing and ensuring that foreign trade practices do not compromise US national security. Experts note that this move could reshape the import landscape for heavy-duty vehicles and vehicle parts across the country.

The extension of tariff relief allows automakers to continue benefiting from a 3.75% offset on imported vehicle parts used in US-assembled vehicles. Originally scheduled to phase out over time, the offset program will now remain in effect until 2030, providing critical support for US automakers amid rising global trade tensions. A similar program for medium and heavy-duty trucks has also been extended through 2030, ensuring that domestic vehicle production remains incentivized. Analysts say that the Trump administration’s approach seeks to balance protective tariffs with continued support for American manufacturers, particularly in the auto and truck sectors.

Under the new order, imported trucks will face a 25% tariff, but some favorable treatment will be granted under the US-Mexico-Canada Agreement (USMCA). Trucks qualifying for USMCA benefits will have their non-US content targeted for the tariff, while eligible truck parts will remain tariff-free until the Commerce Department finalizes rules for assessing non-US content. This nuanced approach aims to shield American-based vehicle production while maintaining pressure on foreign suppliers. Economists warn that the tariff could impact heavy truck imports, as the US sources nearly 78% of these vehicles from Mexico and 15% from Canada.

The Trump administration has justified these tariffs under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. Similar investigations have previously led to tariffs on steel, aluminum, and automotive products. By extending offsets for domestic automakers while imposing tariffs on imported trucks, the administration aims to promote US manufacturing and reduce trade imbalances. Officials emphasize that the new tariffs are not intended to punish neighbors like Mexico or Canada but to encourage production within the United States while maintaining free trade benefits under USMCA.

While imported buses will face a 10% tariff with no special USMCA treatment, the broader impact of the truck tariffs could be substantial. Trade experts say that Mexico’s exports of heavy vehicles to the US have already fallen nearly 26% in the first eight months of the year, reflecting the broader impact of trade pressure. Analysts suggest that the Trump administration’s tariffs could incentivize more production and assembly within the US, benefiting domestic labor markets but also potentially raising costs for fleet operators and logistics companies relying on imported trucks.

Trump’s latest trade action underscores the administration’s aggressive stance on protecting American manufacturing while navigating complex international trade relationships. The combined effect of extending auto tariff relief and introducing steep tariffs on imported medium and heavy-duty trucks signals a continued effort to reshape the US automotive and truck market. Observers expect the move to trigger negotiations with trading partners, especially Mexico and Canada, as well as broader discussions about the future of US industrial and automotive policy in a globalized economy