US President Donald Trump today signed an executive order that, effective November 1, imposes a 25 percent tariff on imported medium- and heavy-duty trucks, excluding vehicles sold under the Canada-United States-Mexico Agreement.
Trump is also giving U.S. automakers additional relief from tariffs on auto parts, extending a short-term rebate through 2030.
The amendments provide for a discount of 3.75 percent from the selling price of a domestically assembled car. This figure was achieved by introducing a 25 percent import tax on spare parts, which amount to 15 percent of the vehicle's selling price. If you multiply these two percent, you get 3.7 percent.
The discounts will now also be offered to truck and engine manufacturers, officials said.
Industry Minister Mélanie Joly threatened legal action over automaker Stellantis' plan to move production of the Jeep Compass to the U.S. on Wednesday, saying Stellantis has agreed to maintain its “full presence in Canada, including Brampton,” while accepting financial support from Ottawa. Canadian Automobile Manufacturers Association president Flavio Volpe argues Ottawa should suspend billions of dollars in subsidies to Stellantis' battery plant in Windsor, Ont., unless the company resumes car production at its Brampton assembly plant, saying “we shouldn't let them off the hook – Donald Trump doesn't the only bully around.” Additionally, Newfoundland and Labrador Premier-designate Tony Wakeham addresses concerns about his approach to the province's preliminary hydroelectric agreement with Quebec.
Trucks under the trade agreement, better known as CUSMA, will only be subject to tariffs on non-U.S. parts.
The latest fees will not yet affect auto parts that meet the requirements of the North American Trade Agreement.
A 10 percent tariff will be introduced on buses and intercity buses.
Trump last month threatened to impose tariffs on heavy trucks, saying it would protect American industries from foreign competition.
Trump used Section 232 of the Trade Expansion Act of 1962 to impose the latest tariffs on trucks, which will affect semi-trucks and large pickup trucks, mirroring levies he had already imposed on smaller vehicles earlier this year.
This adds to a growing list of industry tariffs that include steel, aluminum, copper and lumber.
Last month, Trump threatened to impose tariffs on heavy trucks, saying it would protect American industry from “unfair foreign competition.”
“President Trump is strengthening America's ability to produce medium- and heavy-duty trucks and critical parts that are vital to America's military readiness, emergency response capabilities, and critical infrastructure for economic activity,” the White House said in a fact sheet.
The American Trucking Associations expressed its opposition to the tariffs, saying they could lead to higher prices in an industry already suffering from tariffs on steel and aluminum.
A May statement to the government said the U.S. trucking industry operates on thin margins and has been in a trucking recession for years, with rates falling and truck operating costs rising.
The trucking lobby group wrote that it “does not believe that heavy truck imports pose a national security threat as outlined below.”
The North American auto industry is deeply integrated, and many trucks were already produced in the United States using parts from other countries.
The effects of the latest tariffs will likely be felt in Mexico, although some heavy-duty and medium-duty vehicle companies do have presence in Canada.
Paccar, which makes large commercial trucks, has operations in Canada. In August, the company laid off employees at its plant in Sainte-Thérèse, Quebec.
