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The tariffs scheduled to take effect on November 1, recently had several aspects of their implementation clarified.
The Trump administration announced a few weeks ago the implementation of 25% tariffs on heavy truck imports under Section 232. These tariffs were scheduled to take effect on November 1 and would apply to all imports of heavy trucks and their parts. However, on the evening of Friday, October 17, several aspects of their implementation were clarified.
According to government statements, the 25% tariff will apply only to the total value of trucks that do not meet the requirements for preferential treatment under the United States-Mexico-Canada Agreement (USMCA). In contrast, parts for medium- and heavy-duty trucks that comply with USMCA rules, as well as those manufactured in the United States, will be exempt from the tariff.
Exemptions from the 25% tariffs on medium- and heavy-duty trucks
The Trump proclamation stated that, to prevent tariff evasion and ensure that the goal of eliminating the national security threat posed by imports is not undermined, it is necessary to establish a process for identifying and imposing additional tariffs where appropriate.
In this regard, the administration indicated that tariffs on medium- and heavy-duty truck parts will apply only to key components such as engines, transmissions, tires, and chassis. Moreover, the president clarified that, in the case of trucks meeting USMCA requirements, tariffs will only apply to the value of the non-U.S. content of the vehicle.
Nonetheless, despite the clarifications made on Friday, October 17, there remains the possibility that these exemptions will be temporary. According to information reported by Commercial Carrier Journal, parts that comply with USMCA standards will remain exempt from tariffs until “the Secretary of Commerce, in consultation with U.S. Customs and Border Protection, establishes a process for applying tariffs to the non-U.S. content of parts.”
Encouraging domestic production
According to the announcement, medium- and heavy-duty trucks originating from Mexico and Canada that meet USMCA requirements may submit documentation to the Secretary of Commerce identifying the amount of U.S. content in each model imported into the United States. These include Class 3 to Class 8 medium- and heavy-duty trucks, large pickup trucks, moving trucks, freight trucks, dump trucks, and tractor-trailers, according to the White House.
The proclamation aims to encourage domestic production of medium- and heavy-duty trucks in the United States between 2025 and 2030. Trucks, engines, and other components subject to this new tariff will not be subject to additional or existing sectoral tariffs on steel, aluminum, copper, automobiles and auto parts, or lumber, according to the administration. Likewise, they will not be subject to reciprocal tariffs or to those imposed on Canada, Mexico, Brazil, or India.
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