WASHINGTON / TORONTO — U.S. President Donald Trump has announced sweeping new 25 per cent tariffs on medium- and heavy-duty truck components and 10 per cent tariffs on buses, marking the latest escalation in his administration’s protectionist trade agenda that’s already impacting several Canadian industries.
The new duties, set to take effect on November 1, target large pickup trucks, cargo and moving trucks, dump trucks, and tractor units for 18-wheelers, according to a White House fact sheet released on October 17.
While the proclamation provides limited carve-outs under the Canada–U.S.–Mexico Agreement (CUSMA), the new measures are expected to cause significant disruptions to North America’s integrated automotive supply chain, especially in Ontario, home to several major truck assembly and parts manufacturing facilities.
Tariff Details and National Security Justification
The Trump administration invoked Section 232 of the U.S. Trade Expansion Act of 1962, citing national security concerns. The White House argues the new tariffs will “fortify America’s ability to manufacture medium- and heavy-duty trucks and essential parts,” which it deems critical for the military, emergency services, and infrastructure sectors.
Under the new structure:
- Non-CUSMA-compliant trucks will face the full 25% tariff on the total value of the vehicle.
- CUSMA-compliant trucks will only be taxed on the non-U.S. content within the vehicle.
- A separate 10% tariff will apply to school buses, transit buses, and motor coaches.
- Truck parts, including engines, transmissions, tires, and chassis, will also face the 25% levy unless they meet CUSMA-origin standards.
To incentivize domestic manufacturing, the administration plans to offset part of the tariffs through a 3.75% rebate tied to the total value of trucks assembled in the U.S. between 2025 and 2030, effectively rewarding American producers.
Canadian Impact
Trade experts warn the tariffs could hit Ontario’s auto and parts industry particularly hard. Canada exports billions in truck parts and components annually to the U.S., with supply chains closely integrated between Windsor, Brampton, Detroit, and Illinois.
The move follows a week of turbulence for the sector after Stellantis announced it would shift Jeep Compass production from Brampton, Ontario, to Illinois, despite prior assurances of keeping production in Canada — a decision widely seen as fallout from Trump’s manufacturing-first agenda.
Canada, the U.S., and Mexico are currently preparing for the 2026 CUSMA review, where auto trade rules are expected to be a key point of contention.
Growing List of U.S. Tariffs
The heavy-truck duties join a series of sector-specific tariffs recently imposed by Washington:
- 50% tariffs on aluminum and steel imports.
- 25% tariffs on non-U.S.-built cars and trucks.
- 50% tariffs on copper.
- 10% tariffs on wood products (including softwood lumber), increasing to 30–50% by January 2026 for non-trade partners.
- Elimination of the de minimis exemption for imports under $800, meaning all Canadian shipments are now subject to full duties.
According to the Canadian Federation of Independent Business (CFIB), the combined effects of these measures could push Canadian softwood lumber tariffs above 35 per cent, while auto manufacturers face rising costs and reduced competitiveness across the border.
With trade tensions rising once again, Ottawa is expected to push back in upcoming CUSMA consultations, warning that repeated tariff shocks could threaten thousands of Canadian jobs tied to the North American automotive corridor.