Trump Extends Auto Tariff Relief While Imposing New Duties on Imported Trucks

U.S. President Donald Trump on Friday signed an executive order extending tariff relief for automakers importing vehicle parts, while simultaneously formalising new 25% duties on imported medium and heavy-duty trucks and components, set to take effect from 1 November.

The move follows the administration’s Section 232 investigation into truck imports, initiated earlier this year to assess potential threats to U.S. national security. The investigation, authorised under the Trade Expansion Act of 1962, has previously been used by Trump to justify tariffs on imported steel, aluminium, and automobiles—part of his broader agenda to revitalise domestic manufacturing and penalise nations he claims have taken advantage of the United States.

Key Tariff Measures

Under the extended arrangement, automakers assembling vehicles in the United States can continue applying a 3.75% offset against each vehicle’s list price until 2030. Initially set to phase out after one year, the programme will now remain unchanged for another five years.

A parallel offset system will also apply to medium and heavy-duty trucks, ensuring similar incentives for domestic assembly.

Senior U.S. officials described the updated tariff regime as a “balanced approach”, rewarding U.S.-based production while maintaining strategic trade protections.

Although imported trucks will face steep new tariffs, the administration confirmed favourable provisions under the U.S.-Mexico-Canada Agreement (USMCA). Vehicles that meet USMCA origin criteria will only have non-U.S. content subject to the new 25% tariff.

According to Capital Economics, the United States sources 78% of its heavy truck imports from Mexico and 15% from Canada.
Therefore, these neighbouring nations will be partially shielded under USMCA exemptions.

However, imported buses will not benefit from the same arrangement and will instead face a 10% duty without preferential treatment.

Both Canada and Mexico have been in discussions with Washington to mitigate trade disruptions, as Trump’s administration has repeatedly targeted America’s closest trading partners with sharp levies throughout the year.

Mexico, in particular, has experienced significant strain: between January and August, its exports of heavy vehicles to the U.S. fell by nearly 26% year-on-year, highlighting the economic toll of ongoing trade frictions.