Heavy-duty truck tariff roundup
- President Donald J. Trump announced the 25% tariff Thursday night on Truth Social. It will take effect Oct. 1. It's unclear whether the tariff includes truck parts or medium-duty trucks.
- The tariffs come after a Section 232 investigation into truck manufacturing as a matter of national security.
- The investigation drew hundreds of public comments from OEMs, suppliers, distributors and dealers.
President Donald J. Trump announced a new heavy-duty truck tariff Thursday evening. The 25% levy will take effect Oct. 1, the president said on Truth Social.
“We are looking forward to reviewing the details of the Medium and Heavy Truck Section 232 announcement made by the President,” a spokesperson for Paccar told CNBC. Section 232 refers to the section of the Trade Expansion Act that allows for tariffs on national security grounds. Trump has previously used the section to impose tariffs on automobiles and parts, steel and aluminum, and copper.
Paccar is a net exporter of heavy-duty vehicles and supported tariffs in public comments on the Section 232 investigation. It says it builds more than 98% of Peterbilt and Kenworth trucks for the U.S. market domestically.
“The current tariff structure is significantly disadvantaging American-made medium- and heavy-duty trucks compared to trucks assembled in Mexico,” Paccar says. “American-made heavy-duty trucks have been up to a $10,000 or more per truck cost disadvantage compared to trucks assembled in Mexico. “We support President Trump’s goal of producing medium- and heavy-duty trucks in America and look forward to working with the Administration to design a tariff structure for truck parts and components that will encourage suppliers to continue shifting production and materials sourcing to the U.S., where feasible while supporting truck manufacturers that build finished vehicles in America.”
Volvo, whose North American headquarters is in Greensboro, N.C., and who has 12 manufacturing facilities in seven states, also is building a $1 billion plant in Monterrey, Mexico, it expects to open next year. It will build trucks for the North American market, including the U.S. The company notes in its public Section 232 comments that many critical components for the truck market are put at risk by export controls, which can be a retaliatory measure to U.S. tariffs.
Additionally, Volvo identified roadblocks to the proliferation of domestic parts suppliers. This includes attracting new investments for low part volumes; new investments for legacy parts; attracting and retaining supplier investments that are not cost competitive in the U.S., such as wire harnesses; and the significant lead time suppliers need for setting up operations domestically.
The company went on to encourage the Bureau of Industry and Security to work with OEMs to encourage domestic manufacturing and assembly and to bolster the U.S. workforce to address a manufacturing skills gap.
“Since the entire industry has a global supply chain, new tariffs on truck parts would mean considerable additional cost increases for all manufacturers, dealers and ultimately for trucking customers both in the U.S. and in export markets,” Volvo says.
Where do U.S. trucks come from?
The largest importer of trucks to the U.S. is Mexico. That country, for its part, opposes the tariffs; its government has not yet provided full details of any retaliatory measures. Nearly 80% of imported heavy trucks come into the U.S. from Mexico, which is home to 14 manufacturers and assemblers of buses, trucks and tractors, as well as two manufacturers of engines.
It is unclear whether the new tariff would apply to all heavy-duty trucks or only those that do not comply with the U.S.-Mexico-Canada Agreement (USMCA). Under that agreement, heavy-duty trucks can be imported tariff-free if at least 75% of their value in materials and labor comes from North America.
“Heavy-duty tractors bought by U.S. carriers only come from two places: The United States and Mexico,” the American Trucking Associations (ATA) wrote in May, as the Bureau of Industry and Security solicited comment during the Section 232 investigation. “There are virtually no other countries that export finished heavy-duty tractors into the U.S. market. As a [USMCA] country, we do not believe Mexican truck production poses a national security risk to the U.S. In fact, truck production throughout North America is highly integrated.”
In its comments, International pointed out the money the industry spent in building up USMCA-compliant supply chains and manufacturing.
“Many suppliers have tiered supply chains wherein raw materials and sub-components come from areas outside of the U.S. and the USMCA territory. Finding cost-effective alternatives locally without increasing the price to the end user is not feasible with current labor and resources available in the U.S.,” it says. “Manufacturers should not be penalized with tariffs on imports from Mexico and Canada after making significant investments and adjustments to conform to the USMCA requirements.”
How are tariffs affecting trucking?
Truck manufacturing is also exposed to 50% steel and aluminum tariffs and derivative tariffs on specific components and trailers, which has raised the price of some raw materials brought into the country. With the trucking industry enduring a persistent sluggish freight market, the ATA says higher equipment prices won’t help U.S. operators.
“Motor carriers can’t just absorb higher truck prices or pass them along to customers,” the ATA continues. “Instead, fleets will be faced with no other option but to drastically reduce truck buying by extending trade cycles. This will lead to a large drop in truck manufacturing in the U.S. and Mexico as well as a corresponding drop in manufacturing of parts for new trucks.”
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New Class 8 trucks cost, on average, $170,000, and a 25% tariff could bring certain trucks up to $200,000, not including the federal excise tax (FET). “That brings the total price of a new truck, on average, to $224,000, which is simply cost prohibitive for the vast majority of trucking companies,” ATA says.
This tariff, in addition to others imposed since Trump took office, are causing prices to rise across the board, the U.S. Chamber of Commerce says, creating uncertainty that’s roiling the broader U.S. economy.
“Broad-based tariffs recently threatened and imposed by the administration on approximately $3 trillion of imported goods — including duties on goods from nearly all countries as well as autos, auto parts, steel and aluminum from all sources — are imposing new burdens on the U.S. economy,” the Chamber says. “Cost increases and changes in tariffs are creating uncertainty for businesses who cannot make long-term decisions and adequately plan for their futures.”
The Truckload Carriers Association (TCA) also wrote in opposition to new tariffs.
“Any disruption to the supply chain, especially those that increase operational costs, threatens to undermine that progress entirely,” the organization says. “Carriers are already facing dramatic increases in key cost areas, most notably insurance premiums, which some have reported surges of 20-30%. If tariffs are imposed on truck parts or other essential components, the added financial burden will further diminish profitability.”
Will truck parts face a tariff?
That’s unclear as of Friday morning. The investigation notice did include truck parts and medium-duty trucks, while Trump’s Truth Social announcement made no mention of either.
The TCA said in its May comments some carriers were already reporting higher parts prices in anticipation of tariff increases, and distributors wrote in saying they’re seeing increases, too. Action Truck Parts (ATP) says despite a positive first quarter of 2025, it’s worried.
“The National Association of Wholesaler-Distributors (NAW) released a survey recently that shows a third of distributors are already facing price hikes of 25% or more. More than 60% of distributors expect the cost of their goods to rise by 10% or more this year and almost 70% are reporting a negative effect on their business,” ATP wrote, adding it has very few suppliers that are entirely domestic. “Perhaps the biggest economic headwind isn’t the tariffs themselves but the uncertainty caused by the lack of clarity around the policies and the haphazard way the tariffs were implemented. … ATP concludes that while current demand for truck parts remains solid and projected 2025 demand remains strong, neither is as high as it was projected to be prior to the announcement of the Trump administration’s tariffs.”
Some manufacturers sent in comments supporting Section 232 tariffs, such as Webb Wheel. It encouraged levies on imports of cast iron brake rotors, drums, and truck and trailer wheel hubs.
“Webb already has unused capacity as a result of dumped and subsidized cast iron brake drums,” the company wrote. “Webb could increase production of hubs, rotors and drums to meet increased demand if it could achieve sustainable prices. … Foreign imports of truck parts, including from China and Turkey, are entering the U.S. market at aggressively low prices, thus further increasing demand for such imports and displacing domestically manufactured truck parts. These imports threaten the sustainability and longevity of the domestic truck parts industry.”
Other manufacturers opposed the move. BorgWarner, which says it employs more than 6,000 people in the U.S. and 40,000 people worldwide, expressed “deep concern” for the tariffs.
“Increasing tariffs risk increasing costs throughout our supply chain, diminishing our U.S. manufacturing competitiveness and disrupting job-creating operations domestically,” the company wrote. “Contrary to their stated intent, these tariffs would undermine national security by weakening the American industrial base and severely restricting U.S. truck markets due to higher costs.”
Daimler, in its comments, noted tariffs will also impact the aftermarket for warranty and non-warranty repairs.
“Whether through a dealer, third-party repair shop or DIY mechanics, DTNA forecasts that the adverse impact on aftermarket parts and components will be a significant reduction in overall demand,” it said. “That impacts not only the producers of medium- and heavy-duty truck components, but also the many dealers, repair facilities and independent retailers who ensure the continued safe operation of trucks.”
What do dealers think about tariffs?
Dealers also commented on the Section 232 investigation. Mike Ellifritz, director of aftermarket development at Four Star Freightliner, says tariffs causing higher truck and part prices may reduce vehicle sales, service sales and parts sales.
“The import of medium- and heavy-duty trucks and truck parts is not a threat to the national security interests of the United States, but imposing tariffs that drive up the cost of these vehicles may adversely affect the U.S. truck market and my job,” Ellifritz wrote. “The truck market relies on a complex, integrated supply chain that is not easily moved. … This creates unique supply chain challenges driven by the complexity associated with highly customized, low volume components, and the barriers to entry for new participants are extremely high. Today’s integrated North American supply chain is resilient, delivering trucks and parts to our customers at costs that allow them to procure the newest, safest vehicle technologies at competitive prices.”
Other dealers weighed in with similar comments, such as Velocity Vehicle Group, I-State Truck Centers, Southport Truck Group, Truck Country, Birmingham Freightliner and Western Star, and Floyd’s Truck Center.
“Non-tariff trade barriers of safety regulations, design requirements, length and weight laws, and emissions certifications have created a tight supply chain for the industry,” the American Truck Dealers (ATD) says. “Newly implemented tariffs have created unlevel market conditions and introduced more uncertainty to the truck purchasing process, resulting in less truck sales already. As truck dealers face decreased sales, more dealership employees will likely lose their jobs.”
At the same time, ATD alleges, higher truck part prices will lead to operators deferring service and repairs, raising safety concerns.
“Additional tariffs on the trucking industry would simply be a burden the industry cannot bear,” ATD says. “The imposition of additional tariffs on trucks and truck parts will only intensify the current challenges facing the industry leading to further economic uncertainty for truck dealers and consumers, decreased truck sales, and the loss of more jobs in the trucking industry.”
