New Tariffs Announced on Medium and Heavy-Duty Vehicles, Buses, and Parts
Last week, President Trump signed orders creating new tariffs related to medium-duty vehicles, heavy-duty vehicles, and buses. These tariffs will go into effect on November 1, 2025.
Medium-duty and heavy-duty vehicles and some of their parts imported from abroad will be subject to a 25 percent import tax. For those vehicles and parts that qualify for preferential treatment under the United States Mexico Canada Agreement (USMCA), the tariff will only apply to the value of components not made in the U.S. Medium-duty and heavy-duty manufacturers who assemble their trucks in the United States could be eligible for a 3.75 percent tariff liability reduction if they meet certain criteria. President Trump's order also applies this 3.75 percent tariff liability reduction to light-duty manufacturers' vehicles that are assembled in the U.S. Eligibility for the reduction will last until 2030. The individual parts subject to the tariff include engines, transmissions, tires, and chassis.
The non-U.S. contents of individual parts that are USMCA-compliant and imported for medium-duty and heavy-duty vehicles will not be subject to the 25 percent tariff until after the U.S. Secretary of Commerce creates a process for determining the value of the non-U.S. content. Knock-down kits or other equivalent parts compilations will remain subject to the 25 percent tariff even if they meet USMCA requirements. The knock-down kit exclusion applies for light-,medium-, and heavy-duty vehicles.
Additionally, this order imposes a 10 percent tariff on imports of buses, including school buses, public transit buses, and motor coaches.
President Trump previously imposed a 25 percent flat tariff on light-duty and most light-duty parts imports, with exemptions for USMCA-compliant products. Automotive imports from China are subject to additional tariffs.
Click here to read the proclamation in its entirety.
Click here for the full list of parts subject to the tariff.
Click here to read the White House's fact sheet on the proclamation.