A new 25% tariff on medium- and heavy-duty trucks will take effect in a little more than a week, prompting plenty of questions.
How will the tariffs work? What is President Donald Trump hoping to gain from the tariffs? How will they affect new truck prices in the United States?
While we still don’t have answers to all of these questions, we do have more insight after the White House recently issued a fact sheet about the new tariffs, which are set to begin Nov. 1.
How will the tariffs work?
Trump’s proclamation, which was issued on Oct. 17, imposes a 25% tariff on imports of medium- and heavy-duty trucks, as well as truck parts.
That means that tariffs will apply to big rigs, dump trucks, cargo trucks, moving trucks and large pickup trucks. Key truck parts, such as engines, transmissions, tires and chassis, will apply. There will also be a 10% tariff on imports of buses.
“These tariffs shall apply to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. Eastern Daylight Time on Nov. 1, 2025, and shall continue in effect, unless such actions are expressly reduced, modified or terminated,” Trump wrote in the proclamation.
For trucks that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA), the tariff will only apply to the value of the non-U.S. content in the vehicle. Trucks that don’t qualify under USMCA will be tariffed on the full value of the vehicle. USMCA-compliant truck parts for medium- and heavy-duty trucks will not be subject to the tariffs until the Secretary of Commerce and the U.S. Customs and Border Protection establish a process to apply tariffs to the non-U.S. content of the parts.
To encourage domestic production, manufacturers will be eligible for an offset to a portion of the tariffs for trucks that are assembled in the U.S.
The truck tariffs will not be tacked on to existing tariffs for such materials as steel, aluminum, copper, automobile parts and lumber. They also will not be subject to reciprocal tariffs or the tariffs imposed on Canada, Mexico, Brazil or India.
The complete details of Trump’s proclamation can be found here.
What’s the goal?
Since President Trump first announced plans to impose a tariff on big trucks in late September, he said the action was motivated by national security and an aim to encourage U.S. manufacturing.
“In order to protect our Great Heavy Truck Manufacturers from unfair outside competition, I will be imposing, as of October 1st, 2025, a 25% Tariff on all ‘Heavy (Big!) Trucks’ made in other parts of the World,” Trump posted to Truth Social on Sept. 25. “Therefore, our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks and others, will be protected from the onslaught of outside interruptions. We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!”
On Oct. 6, he moved the start date back to Nov. 1.
According to the fact sheet, the tariffs will fortify America’s ability to manufacture medium- and heavy-duty trucks and essential parts. The administration believes that will help America’s military readiness, emergency response capabilities and critical infrastructure for economic activity.
“Since the 1990s, foreign industrial practices and other policies have stimulated foreign vehicle manufacturing at the expense of American manufacturing and innovation,” the White House wrote. “In a time of crisis, America would need adequate, reliable domestic manufacturing capacity for medium- and heavy-duty trucks, medium- and heavy-duty truck parts and buses. Only factories here, on American soil, subject to American law, can provide that kind of reliable capacity.”
What does this all mean?
As has been the case with all of the recent tariffs, the final impact will remain uncertain until the new rules begin and we can see how businesses react.
The American Trucking Associations previously spoke out against potential heavy-duty truck tariffs because the majority of the imports come from Mexico.
“As a USMCA (United States, Mexico, Canada Agreement) country, we do not believe Mexican truck production poses a national security risk to the U.S.,” ATA Senior Vice President Bob Costello wrote in comments filed to the U.S. Department of Commerce on May 16. “In fact, truck production throughout North America is highly integrated. Even when a truck is assembled in Mexico, major components often come from factories in the U.S., like transmissions and engines. Per the USMCA, heavy-duty trucks are already required to have 64% North American regional content, with that percentage increasing to 70% by 2027.”
Jason Miller, a professor of supply chain management at Michigan State University, said that the truck tariffs basically amount to a clone of what is being done in the auto sector.
The impact will be substantial, Miller said, considering that the U.S. imported about $20 billion worth of medium- and heavy-duty trucks in 2024.
But will it mean in terms of prices?
“I would certainly think you would have to be looking at a 5 or 10 percent increase in the price a new truck,” Miller said. “The issue is that demand remains weak. That may keep sort of a lid on it for now. The next time there’s an expansionary market cycle, you can imagine that truck prices will increase substantially.”
Paccar, which makes Kenworth and Peterbilt trucks, believes the tariffs could be beneficial to the company.
“It will be good for the fact that we manufacture our trucks in Texas, Ohio and Washington,” Paccar CEO Preston Feight said during a third-quarter earnings call on Tuesday, Oct. 21. “And it should improve our competitive position as we look forward into next year.” LL