Section 232 Tariffs Take Effect Nov. 1 on Heavy-, Medium-Duty Trucks

There will be USMCA favorable treatment for eligible imports of affected trucks, meaning that the non-U.S. content will be subject to the 25% tariff, but the U.S. content will not be, according to a senior White House official, speaking on a background call with reporters.

Buses will not be available for preferential treatment under USMCA, which means "the entirety of the vehicle will be subject to the 10% tariff," the official said. The bus tariffs will be on "school buses, city buses, motor coaches, things like that," the official said.

Truck and bus parts imported from Mexico or Canada will come in duty-free, as long as they meet USMCA rules of origin. The Commerce Department eventually plans to charge a tariff on the non-U.S. value of these parts, as well as those destined for autos and light trucks, but has not yet come up with a methodology to do so.

The official said that Commerce doesn't "expect to do anything on" establishing that process for parts "at least in the coming months," because "we're still working that out." That delay will be "favorable" to domestic manufacturers, they said, because those parts will be entering tariff-free "until we can establish a method to tariff only the non-U.S. content."

The proclamation says that imports of "knock-down kits or equivalent parts compilations, as determined by CBP, shall continue to be subject to the additional ad valorem duty rate imposed under this proclamation regardless of USMCA preferential treatment qualification."

For medium- and heavy-duty trucks assembled in the U.S., companies can get an offset of 3.75% of the manufacturer's suggested retail price of the finished vehicle, if there were tariffs paid on parts that add up to that amount (or more). Such a program is already in place for automobiles and light trucks (see 2504290026).

For all the vehicles, the 3.75% offset will be available through 2030. Previously, the administration was planning to step down the credit for cars to 2.5% for the year beginning May 1, 2026, and then end the credit.

A White House official said that the extension of the program came after "conversations we've had with people in the industry," and was to "incentivize domestic production" of automobiles.

Another break for the sector is that aluminum or steel imported from Canada or Mexico, that was smelted and cast or melted and poured in those countries, and is used by car and truck manufacturers, can be subject to 25% tariffs, rather than 50% tariffs. However, the Commerce Secretary will limit that break to the amount of metals that announced expansions in the U.S. are expected to produce. That break is also available to heavy truck and bus manufacturers.

The new tariffs will apply to used and remanufactured trucks and buses, but only if they were manufactured in the last 25 years.

If there are Japanese or European truck parts or heavy-duty engine parts that are being imported, those parts will be subject to a 15% all-inclusive rate, rather than the 25% rate, said the senior White House official on the call.

"This is a proclamation that's designed to restore the sector, keep those jobs here, expand the production here, and address the national security importance of this sector to the economy," the official said. "Because we already have robust domestic production in this country, and because we've designed a very fair import adjustment offset program, we do not expect to see any sort of price increases as a result of these tariffs."

The proclamation said the tariffs are warranted because Class IV through Class XIII trucks sold in the U.S. are 43% imports; it also said that semi trucks, the Class XIII, are 50% imports.

These trucks "are indispensable to the continuity of American critical infrastructure and economic stability, moving over 70 percent of the Nation’s freight by weight, including essential goods like food, fuel, and medical supplies."

The stacking rules that apply to cars and light trucks will also apply to medium- and heavy-duty trucks and buses. Even if there is no duty owed, because the parts qualify for USMCA, or because the import is offset, the product counts as subject to this Section 232 tariff, the proclamation says.

Drawback claims that are made through subsections (a) and (b) of section 313 of the Tariff Act of 1930, as amended, will be allowed, but not any other drawback. However, drawback may result in lower offset allowances, the proclamation warns.