U.S. President Donald Trump announced on Monday that starting November 1, 2025, all medium- and heavy-duty trucks imported into the United States will face a 25 per cent tariff, in a significant escalation of his administration’s trade protection measures.
Trump initially signaled the tariff move in September, citing national security grounds as the justification for the duties. He said the tariffs are intended to protect U.S. manufacturers from what he called “unfair outside competition,” and to benefit domestic companies such as Paccar-owned Peterbilt and Kenworth, and Daimler Truck-owned Freightliner.
The new tariffs cover a wide range of larger vehicles, including delivery trucks, garbage trucks, public utility vehicles, transit and school buses, shuttle buses, tractor-trailers, semi-trucks, and other heavy-duty vocational vehicles.
The announcement has drawn concern from industry groups and U.S. allies. The U.S. Chamber of Commerce urged the Commerce Department not to impose the new tariffs, emphasizing that the top five import sources — Mexico, Canada, Japan, Germany, and Finland — are allies or close partners that do not pose a national security threat.
Mexico, the largest exporter of medium- and heavy-duty trucks to the U.S., is expected to be most affected. Imports from Mexico have tripled since 2019 to around 340,000 vehicles, according to U.S. government data. Under the USMCA trade agreement, these trucks currently move tariff-free if at least 64 per cent of their value originates in North America through parts, materials, or labour.
The new tariffs could have wide-ranging implications for automakers and logistics companies operating in North America. Stellantis, the parent company of Chrysler, manufactures heavy-duty Ram trucks and commercial vans in Mexico and has been lobbying the White House to avoid steep duties. Sweden’s Volvo Group is also investing US$700 million in a new heavy-truck factory in Monterrey, Mexico, scheduled to begin operations in 2026.
Mexico’s government has opposed the new tariffs, pointing out that on average, 50 per cent of the content of Mexican-exported trucks is made in the U.S., including key components like diesel engines. In 2024, the U.S. imported nearly $128 billion in heavy vehicle parts from Mexico, accounting for roughly 28 per cent of total U.S. imports, according to Mexico’s submission to the Commerce Department in May.
Under existing trade agreements with Japan and the European Union, the U.S. maintains a 15 per cent tariff on light-duty vehicles, but it remains unclear whether similar terms will apply to larger vehicles under the new policy. The Trump administration has previously allowed producers to deduct the value of U.S.-made components from tariffs on light-duty vehicles assembled in Canada and Mexico, raising questions about how these rules will interact with the new 25 per cent rate.
The tariff decision is expected to reshape North American supply chains, strain trade relations with key allies, and increase costs for transportation and logistics sectors dependent on imported medium- and heavy-duty vehicles.