New 25% truck import tariff aims to bolster U.S. manufacturing but could lead to rising costs and delayed orders for fleets

With a 25% tariff on imported heavy-duty trucks set to go into effect on November 1, following a September 25 social media post by President Trump initially announcing it, followed by an October 17 proclamation issued by the White House, the potential impact of this action on the trucking sector and shippers remains to be seen, at this point.

In his social media post, President Trump said he was taking this action, “In order to protect our Great Heavy Truck Manufacturers from unfair outside competition,” adding that, “our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others will be protected from the onslaught of outside interruptions. We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!”

In its October 17 proclamation, the White House said that the key objectives of this action focus on various things, including: strengthening national security by rebuilding domestic production of critical vehicles and parts; encourage U.S. manufacturing investment; stabilizing U.S. market share of domestically produced medium- and heavy-duty vehicles (MDHV) at around 80%; and reduce dependency on foreign supply chains for defense and infrastructure resilience. It also stated that USMCA-exempt MHDV may receive adjusted tariffs based on the percentage of U.S. content and a 25% tariff will be applied to the non-U.S. content only, if properly documented.

Prior to the White House’s proclamation being issued, Dan Moyer, senior analyst, commercial vehicles, at freight transportation consultancy FTR, said that this development had rattled fleets, OEMs, and suppliers coping with weak demand, rising costs, and fragile supply chains.

“The tariff adds to an already difficult trade environment,” said Moyer. “Steel, aluminum, and copper duties remain at 50%, raising component costs, and reciprocal tariffs for major trading partners further complicate sourcing. The immediate effect will be higher truck prices, assuming the tariff is officially implemented. Imported Class 8 trucks will face a 25% surcharge, and U.S.-built models may see added costs from imported parts. Some fleets are likely to delay or cancel orders, boosting demand for used trucks as operators extend vehicle lifecycles. Reshoring may accelerate, but U.S. factories are hampered by labor constraints, high costs, and infrastructure limits. In the near term, the market faces higher prices, supply chain disruptions, and ongoing uncertainty.”

Keith Prather, Armada Corporate Intelligence Managing Director, explained that the truck tariffs are not surprising, as they are in line with automotive sector duties, with the bigger issue for the truck makers is whether they can get a tariff break on their components—calling it an incentive to source USMCA-compliant parts.  

What’s more, Prather estimated that roughly 8% of the total U.S. Class 8 trucks sector would be subject to the new tariffs, in turn, pushing the average cost of a tractor from around $175,000 to around $250,000, not including discounting, which he said could drive that number down and soften the blow.

“About 42% of the Class 8 market is imported from Canada and Mexico—only 25% of the Mexican imports are exposed to the tariff and about 5% of the Canadian trucks are exposed and would not be covered by the USMCA agreement (that's how we get to about 8% of the U.S. market carrying the full tariff),” stated Prather. “Most of the major brands have little exposure from what I see, I think this was aimed at keeping Chinese BEV (battery electric vehicles) out of the U.S. I believe that the Section 232 tariffs stack…but many firms already knew that and were creating work-arounds to avoid those.” 

As for how shippers should be thinking about the 25% truck tariff, Marc Schaffer, principal economist, at Breakthrough, said that it adds another element of uncertainty, potentially further prompting them to hold steady, in terms of making decisions related to large capital outlays and, instead, find ways to minimize costs.

“That really is the strategy we're seeing right now in real-time played out, combined with the other thing that we're also noticing as to when rates are going to turn, and when the market's going to turn and also this idea of, ‘how do we also prioritize our long-term carrier relationships for the market when it does turn?’”

Schaffer noted this tariff comes at a time when the heavy-duty OEM truck orders are down and inventories are up, while also noting that, for shippers, especially those with private fleets, the tariffs are likely to have more of a direct impact on replacement rates and also replacement cycles.

“I wouldn't say there's been like a sudden market reaction from the shippers that we've noticed,” he said. “This is just one more piece of the convoluted uncertainty challenge that they are facing.”

A Reuters report stated that the U.S. Chamber of Commerce earlier called on the U.S. Department of Commerce to not to impose new truck tariffs, as the top five import sources are Mexico, Canada, Japan, Germany, and Finland “all of which are allies or close partners of the United States posing no threat to U.S. national security,” it said. The report added that Mexico is the largest exporter of medium- and heavy-duty trucks to the United States, while also citing a study released in January saying imports of those larger vehicles from Mexico have tripled since 2019 to around 340,000 today, based on government statistics.