New US Tariffs on Trucks Take Effect
WASHINGTON: New tariffs on medium- and heavy-duty trucks imported into the United States started on Saturday. However, there will be some relief for vehicles entering the country under a significant trade agreement between North America.
A 25-percent tariff has been imposed on trucks, along with a 10-percent duty on buses. This move follows an investigation by former President Donald Trump’s administration to analyze the impact of these imports on national security.
The Trump administration used the authority granted by the Trade Expansion Act of 1962 to impose these tariffs as part of efforts to support American manufacturing and address concerns over countries perceived as exploiting the U.S. economy.
In addition to trucks, sectors like steel and aluminum faced heavy tariffs of up to 50 percent, with auto imports also seeing a 25-percent duty.
Interestingly, the new truck tariffs will not be added on top of existing tariffs applied to steel, aluminum, copper, autos, and lumber, as confirmed by the White House last October. Additionally, trucks will be exempt from certain “reciprocal” duties that vary based on trade partners.
The American Trucking Associations, which represents approximately 37,000 companies, expressed concerns back in May about the impact of these truck tariffs. They warned that lower sales could hurt manufacturers, dealers, and transport companies.
Most truck imports to the U.S. come from neighboring Canada and Mexico. According to an October report from United Overseas Bank, over 70 percent of heavy truck imports originated from Mexico, while about 20 percent came from Canada.
Under the new tariff system, trucks that qualify for favorable treatment under the USMCA will only face the 25-percent tariff on their non-U.S. content. Truck parts that meet eligibility criteria can come in without tariffs until the Commerce Department establishes a process to target any non-U.S. content.
However, trade pressures have already affected Mexico, with its heavy vehicle exports to the U.S. dropping nearly 26 percent between January and August this year. The Mexican economy has also contracted by 0.3 percent year-on-year in the third quarter, largely due to weakness in the industrial sector.
Mexico is currently in discussions with the former Trump administration to seek a solution that could lessen the effects of these broad tariffs.
