Tariff Update: U.S. to Impose a 25% Tariff on Heavy-Duty Trucks
The Trump administration has released a proclamation imposing Section 232 tariffs on imports of medium- and heavy-duty vehicles and parts, and buses.
“In my judgment, the actions in this proclamation will, among other things, strengthen supply chains; bolster industrial resilience; create high-quality jobs that will expand the skilled workforce in the United States; and increase domestic capacity utilization and United States-produced market share for MHDVs, certain MHDVPs, and buses,” President Trump said in the proclamation.
The proclamation imposes a 25% tariff on imports of medium- and heavy-duty trucks and truck parts:
· Medium- and heavy-duty trucks include Class 3 to Class 8 vehicles, like large pick-up trucks, moving trucks, cargo trucks, dump trucks, and tractors for eighteen-wheelers.
· For medium- and heavy-duty trucks that do not qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA), the tariff will apply to the full value of the vehicle. For medium- and heavy-duty trucks that qualify for preferential tariff treatment under the USMCA, the tariff will only apply to the value of the non-U.S. content in the vehicle.
· The tariff on medium- and heavy-duty truck parts will apply to key parts, including engines, transmissions, tires, and chassis.
· USMCA-compliant medium- and heavy-duty truck parts will not be subject to tariffs imposed in the Proclamation until the Commerce Secretary, in consultation
In addition, the Trump Administration said the Section 232 tariff plan “incentivizes domestic medium- and heavy-duty truck production by offering an offset to a portion of tariffs for medium- and heavy-duty truck parts equal to 3.75% of the aggregate value of all trucks assembled in the United States from 2025 through 2030. This percentage reflects the duty that would be owed when a 25% tariff is applied to 15% of the value of a U.S.-assembled medium- and heavy-duty truck.”
· This offset can be used to adjust any Section 232 medium- and heavy-duty truck part tariffs owed by a medium- and heavy-duty truck manufacturer.
· An equivalent offset program will also be established for medium- and heavy-duty truck engine manufacturers based on the value of medium- and heavy-duty truck engines assembled in the United States.
“Recognizing that medium- and heavy-duty truck and automobile industries share many common suppliers and structural similarities across their supply chains, this Proclamation adjusts the Section 232 automobile tariff program to harmonize that tariff program with the program established for the medium- and heavy-duty truck industry,” the Trump Administration said.
· The proclamation extends the import adjustment offset program for automobile manufacturers through 2030. Automobile producers will be able to offset a portion of tariffs on automobile parts equal to 3.75% of the Manufacturer’s Suggested Retail Price of automobiles they assemble in the United States. This percentage reflects the duty that would be owed when a 25% tariff is applied to 15% of the value of a U.S.-assembled automobile.
Products subject to tariffs under this proclamation will not be subject to additional or existing sectoral tariffs on steel, aluminum, copper, automobiles and automobile parts, and lumber; they also will not be subject to reciprocal tariffs or the tariffs imposed on Canada, Mexico, Brazil, or India.
More details are available on the White House website.