President Donald Trump said Monday that all medium- and heavy-duty trucks imported into the United States will face a 25% tariff rate starting November 1, a significant escalation of his effort to protect U.S. companies from foreign competition.

Trump last month had said heavy truck imports would face new duties on Oct. 1 on national security grounds, saying the new tariffs were to protect manufacturers from "unfair outside competition" and that the move would benefit companies such as Paccar-owned (PCAR.O), opens new tab Peterbilt and Kenworth and Daimler Truck-owned (DTGGe.DE), opens new tab Freightliner.

Under trade deals reached with Japan and the European Union, the United States has agreed to 15% tariffs on light-duty vehicles but it is not clear if they will face that rate for larger vehicles.

The Trump administration has also allowed producers to deduct the value of U.S. components from tariffs paid on light-duty vehicles assembled in Canada and Mexico.

Larger vehicles include everything from delivery trucks, garbage trucks, public utility trucks, transit, shuttle, and school buses and tractor-trailer trucks as well as semi-trucks and heavy-duty vocational vehicles.

The U.S. Chamber of Commerce earlier urged the Commerce Department not to impose new truck tariffs, noting 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."

Mexico is the largest exporter of medium- and heavy-duty trucks to the United States. A study released in January said imports of those larger vehicles from Mexico have tripled since 2019 to around 340,000 today, according to government statistics.

Under the North American free trade deal USMCA, medium- and heavy-duty trucks move tariffs free if at least 64% of a heavy truck's value originates in North America, via parts like engines and axles, raw materials such as steel, or assembly labor.

Tariffs could also affect Chrysler-parent Stellantis (STLAM.MI), opens new tab which produces heavy-duty Ram trucks and commercial vans in Mexico. Stellantis had been lobbying the White House not to impose steep tariffs on its Mexican-made trucks.

Source: Reuters

• USTR Makes Findings and Proposes Action in 60 Section 301 Investigations Relating to Failures to Take Action on Trade in Forced Labor Goods
• [VCCI] The US officially initiates a Section 301 Investigation into Vietnam on Intellectual property
• General Secretary and President To Lam's working visit to three ASEAN countries: Demonstrating the stature of proactive and constructive diplomacy.
• Viet Nam accelerates innovation drive as skilled workforce becomes key to science and technology growth
• The US is increasing controls on AI chip exports