President Donald Trump has signed orders expanding tax credits for U.S. automobile and engine production and introducing new tariffs of 25% on imported medium- and heavy-duty trucks and their parts, effective November 1. The tariffs are being imposed on national security grounds and aim to encourage increased vehicle production within the United States. Mexico, the largest exporter of medium- and heavy-duty trucks to the U.S., could be significantly affected by the new tariffs. In addition, a 10% tariff on imported buses has also been established.
Under the new orders, automakers are eligible for a credit equal to 3.75% of the suggested retail price of U.S.-assembled vehicles through 2030, which helps offset tariffs on imported parts. This credit also applies to domestic engine manufacturing and production of medium- and heavy-duty trucks.
The tariffs cover all trucks classified from Class 3 to Class 8, including large pickup trucks, moving trucks, cargo trucks, dump trucks, and tractor units for 18-wheelers.
The administration states that these measures are designed to protect domestic manufacturers from unfair foreign competition. Companies such as Peterbilt, Kenworth, and Freightliner are expected to benefit from the new policies.
The U.S. Chamber of Commerce has expressed concerns about the tariffs, noting that the main sources of truck imports—including Mexico, Canada, Japan, Germany, and Finland—are close allies or trade partners that do not pose a national security threat.
Major automakers, including General Motors, Ford, Toyota, Stellantis, Honda, and Tesla, will receive financial relief from tariffs on imported auto parts imposed under previous policies. The Commerce Department had earlier announced an import adjustment credit equal to 3.75% of the retail price for eligible U.S.-assembled vehicles through April 2026. The current order extends this credit to five years and broadens its application to more parts.
Ford’s CEO has stated that the orders will help make auto parts more affordable for U.S. manufacturers and will help level the playing field with imports of larger trucks.
Earlier this year, the administration imposed 25% tariffs on over $460 billion worth of vehicles and auto parts but has since reached agreements to reduce tariffs with some countries, including Japan, the United Kingdom, and the European Union. In August, tariffs on steel and aluminium were increased on more than 400 products, including many auto parts, totalling $240 billion in annual imports.
General Motors has reported that it expects tariff-related costs to reach up to $5 billion this year, while Ford has cited an estimated $3 billion impact.
