US to grant tariff relief for truck imports from Mexico and Canada

The US has announced tariff relief for trucks and parts imported from Canada and Mexico ahead of the imposition of the 25 per cent levies, which are set to take effect next month.

President Donald Trump last week announced new tariffs on medium and heavy-duty trucks imported from the US from November 1, a move that the Republican leader says is to protect manufacturers from “unfair outside competition”.

Amid this, senior White House officials have worked out a plan to exempt trucks and their parts that comply with the terms of Trump’s 2020 United States-Mexico-Canada Agreement.

Those trucks will only be subject to tariffs on their non-US content, while parts will remain exempt from duties until the Commerce Department develops a method to calculate tariffs on the non-US portion.

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 US Chamber of Commerce earlier urged Trump 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 US 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 per cent of a heavy truck’s value originates in North America, via parts like engines and axles, raw materials such as steel, or assembly labour.

With inputs from agencies