Trump signs order imposing 25% tariff on truck imports
US President Donald Trump today signed an executive order imposing a 25 per cent tariff on imported medium- and heavy-duty trucks starting November 1, with an exemption for vehicles traded under the Canada-US-Mexico agreement.
Trump is also giving U.S. automakers additional relief from tariffs on auto parts, which was supposed to be a short-term exemption until 2030.
The revised action provides a rebate of 3.75 per cent relative to the selling price of a domestically assembled vehicle. This figure was achieved by imposing a 25 percent import tax on parts that make up 15 percent of a vehicle’s selling price. Multiplying those two percentages together equals 3.7 percent.
Officials said the exemption will now also be extended to manufacturers of trucks and engines.
Industry Minister Mélanie Joly on Wednesday threatened legal action over automaker Stellantis’ plan to shift Jeep Compass production to the US, saying Stellantis agreed to maintain its ‘entire Canadian footprint, including Brampton’ while accepting financial support from Ottawa. Flavio Volpe, president of the Canadian Automobile Manufacturers Association, argues that Ottawa should withhold billions of dollars in subsidies for Stellantis’ Windsor, Ontario, battery plant until the company resumes vehicle production at its Brampton assembly. ‘We shouldn’t discount them – Donald Trump isn’t the only crook.’ Also, Newfoundland and Labrador premier-designate Tony Wakeham responded to concerns about his approach to the province’s temporary hydropower agreement with Quebec.
Trucks that comply with the trade agreement, known as CUSMA, will face tariffs only on their non-U.S. parts.
The latest levy will not affect auto parts that currently comply under the North American trade agreement.
10 percent tariff will be imposed on buses and motorcoaches.
Trump last month threatened a heavy truck levy, saying it would protect American industry from outside competition.
Trump used Section 232 of the Trade Expansion Act of 1962 to impose the latest truck tariffs — which will affect semi-trailers and large pickup trucks — which mirror the levy he imposed on small automobiles earlier this year.
This adds to a growing list of sector-specific duties that include steel, aluminium, copper and wood.
Trump threatened a heavy truck levy last month, saying it would protect American industry from “unfair outside competition.”
“President Trump is strengthening America’s ability to manufacture medium- and heavy-duty trucks and essential parts that are critical to America’s military readiness, emergency response capabilities, and critical infrastructure supporting economic activity,” the White House fact sheet said.
The American Trucking Association has expressed its opposition to the duties, saying they could raise prices in an industry already hit by steel and aluminum tariffs.
In a submission submitted to the government in May, it said the US trucking industry operates on thin margins and had been in a freight recession for years, with falling rates and rising costs of operating trucks.
The trucking lobby group wrote that it “does not believe that imports of heavy-duty trucks pose a national security threat, as described below.”
The North American automobile industry is deeply integrated and many trucks were already being built in the United States with parts from other countries.
The impact of the latest tariffs is likely to be felt most in Mexico – although some heavy- and medium-duty vehicle companies have operations in Canada.
Packer, which produces large commercial trucks, has divisions in Canada. It closed its Ste-Thérèse, Que., facility in August. Employees were fired from the plant.
