Trump Enacts Sweeping Tariffs on Vehicle Imports, Citing National Security

On 17 October 2025, US President Donald Trump signed a proclamation leveraging Section 232 of the Trade Expansion Act of 1962 to enact a new regime of tariffs on imported vehicles and components, a move the administration stated was designed to support American industry and safeguard national security.

The proclamation outlines distinct tariff rates for different vehicle categories and introduces a system of incentives for domestic production.

A central measure is the imposition of a 25% tariff on imported medium- and heavy-duty trucks-defined as Class 3 to Class 8 vehicles, including large pick-up trucks, mobile trucks, freight trucks, dump trucks, and tractor units for 18-wheelers-as well as their key components. These components specifically include engines, transmissions, tyres, and chassis.

The application of these duties varies based on the United States-Mexico-Canada Agreement (USMCA). For trucks ineligible for USMCA preferential treatment, the 25% tariff will apply to the vehicle's full value. For those eligible, the duty will apply only to the value of non-US-origin components.

The proclamation also states that medium- and heavy-duty truck components meeting USMCA criteria will be exempt from these new tariffs until the US Secretary of Commerce, in consultation with US Customs and Border Protection, determines procedures for levying duties on non-US content within such components.

Separately, a 10% tariff will be applied to imports of all passenger vehicles, a category that includes cars, school buses, buses, and coaches.

To incentivise US-based manufacturing, the notice establishes a tariff credit for medium and heavy-duty truck components assembled in the United States between 2025 and 2030. The credit amount is set at 3.75% of the total value of these trucks. This percentage is calculated as the tariff liability that would result from applying the 25% tariff to 15% of the value of US-assembled trucks. Manufacturers may use this credit to offset Section 232 tariffs owed on parts. A comparable offset programme will also be created for manufacturers of medium and heavy-duty truck engines based on the value of US-assembled engines.

Furthermore, citing "numerous commonalities" between the supply chains of the medium/heavy-duty truck and automotive sectors, the proclamation aligns the existing Section 232 automotive tariff programme with the new one. It extends the import adjustment offset programme for automotive manufacturers until 2030. These manufacturers will be permitted to offset a portion of tariffs on US-assembled components, equivalent to 3.75% of the manufacturer's suggested retail price. This rate similarly reflects the duty payable when a 25% tariff is applied to 15% of the value of US-assembled vehicles.

The notice specifies that products affected by these new tariffs will not be subject to existing or future sectoral tariffs on steel, aluminium, copper, automobiles, automotive components, or timber. They are also exempt from retaliatory tariffs imposed on goods from Canada, Mexico, Brazil, or India.

These new tariffs will take effect for goods entered for consumption, or withdrawn from warehouses for consumption, on or after 1 November 2025, at 00:01 Eastern Daylight Time. They will remain in force unless explicitly reduced, modified, or terminated.

In a related development, the US Department of Commerce is conducting additional Section 232 investigations into semiconductors, commercial aircraft, wind turbines, robotics, unmanned aerial systems, and personal protective equipment, which could lead to further tariff increases.