U.S. President Donald Trump has announced a sweeping new trade measure — a 25 per cent tariff on imported medium- and heavy-duty trucks, effective November 1. The move, signed Friday under Section 232 of the Trade Expansion Act of 1962, is being framed by the White House as a step to “fortify America’s manufacturing and defense capabilities.”
The new duty applies to large pickup trucks and semi-trailers, with a partial exemption for vehicles traded under the Canada-U.S.-Mexico Agreement (CUSMA). Trucks compliant with CUSMA rules will only be taxed on their non-American components. A smaller 10 per cent tariff will also target buses and motorcoaches.
While auto parts currently remain exempt, the White House said Commerce Secretary Howard Lutnick will soon design a process to apply tariffs based on the non-U.S. content in those parts. Companies that build and sell finished vehicles domestically are being offered a discount to cushion the impact of these new import costs.
Friday’s proclamation extends beyond the trucking industry. It also provides limited relief from the existing 50 per cent tariffs on steel and aluminum from Canada and Mexico, allowing the Commerce Secretary to temporarily reduce them — but only for companies investing in U.S. production and only for metals used in automobiles.
Trade experts say the move is another nudge for manufacturers to relocate production to the United States. “This further incentivizes movement of production to the U.S., with the carrot being lower steel and aluminum tariffs,” noted William Pellerin, a trade lawyer at McMillan LLP.
The American Trucking Association has strongly opposed the new duties, warning they could raise costs in an already strained industry. “The American trucking industry operates on thin margins,” the group said in a previous submission, emphasizing that imported heavy-duty trucks do not pose a national security threat — the justification used for the tariffs.
The North American auto industry is highly integrated, and most trucks sold in the U.S. already contain parts sourced across Canada and Mexico. Analysts say the new tariffs are likely to hit Mexico hardest, although some Canadian operations — like Paccar’s Ste-Thérèse plant in Quebec, which recently laid off workers — could also feel the ripple effects.
Despite the carveouts, Trump defended the move as a patriotic necessity, saying it will safeguard American jobs and strengthen key industries vital to the country’s economy, infrastructure, and national security.