WASHINGTON, D.C.: U.S. President Donald Trump signed executive orders to expand credits for American auto and engine production while imposing new 25 percent tariffs on imported medium- and heavy-duty trucks and parts, a move designed to boost domestic manufacturing but likely to strain trade ties with key allies.
The tariffs, set to take effect on November 1, will cover Class 3 through Class 8 trucks — including pickup trucks, cargo haulers, dump trucks, and tractor-trailers — and will also apply to truck parts. Trump also announced a 10 percent tariff on imported buses.
The White House said the tariffs were enacted on national security grounds, arguing they would help shift more vehicle production to the United States. However, trade experts warned the measures could hit Mexico especially hard, as it remains the largest exporter of medium- and heavy-duty trucks to the U.S.
Trump's order simultaneously introduces new manufacturing credits for U.S.-assembled vehicles and engines, offering automakers a 3.75 percent credit based on the suggested retail price through 2030. The policy extends a similar credit for domestic production of engines and heavy-duty trucks.
"This move protects American jobs from unfair outside competition," Trump said earlier, noting the decision would benefit truckmakers such as Paccar's Peterbilt and Kenworth brands and Daimler Truck's Freightliner.
The U.S. Chamber of Commerce, however, urged restraint, pointing out that the top five import sources for trucks and parts — Mexico, Canada, Japan, Germany, and Finland — "are allies or close partners posing no national security threat."
The expanded credit builds on a Commerce Department plan introduced in June to offset import-related tariffs on parts used in U.S.-made vehicles. That plan initially offered a 3.75 percent offset through 2026, dropping to 2.5 percent the following year. Under the new order, the credit remains at 3.75 percent for five years. It is expanded to cover more parts, which Republican Senator Bernie Moreno said would "make it more valuable for automakers and give companies more incentive to shift production."
Automakers welcomed the measure as partial relief from years of rising tariff costs. Ford CEO Jim Farley said Trump's order would "help make auto parts affordable for U.S. production," adding that the truck tariffs would "level the playing field with imports."
In May, Trump had already imposed 25 percent tariffs on more than US$460 billion in annual vehicle and parts imports, before later cutting deals with Japan, the UK, and the EU to ease those duties.
The administration also raised steel and aluminum tariffs in August on over 400 auto-related products worth $240 billion in yearly imports, including exhaust systems and electric-vehicle components.
Automakers have warned of the rising costs. General Motors projected up to $5 billion in gross tariff-related expenses this year, while Ford cited a $3 billion hit.
