Trump Extends Auto Tariff Relief, Imposes Truck and Bus Duties

The Trump administration formally imposed 25% tariffs on imported medium and heavy-duty trucks and parts, as well as a 10% duty on buses, while extending a key tariff reprieve for American automakers.

President Donald Trump signed a proclamation Friday hitting trucks and buses with tariffs beginning Nov. 1, according to senior administration officials. Trump previously announced plans to place levies on trucks.

The directive also prolongs through 2030 a tariff discount Trump already provided carmakers that produce and sell completed automobiles in the US, and sets in motion plans to apply the same offset for truck duties. Truck imports that qualify for relief under the US-Canada-Mexico trade agreement will be exempt from the charges, but not buses, the officials told reporters Friday.

The administration is also creating an additional carveout for companies that make engines for passenger vehicles as well as medium- and heavy-duty trucks in the US, which would be patterned on the existing offset program for completed vehicles, but will not take effect immediately.

The decisions underscore Trump’s difficult balancing act as he seeks to reorient global trade flows and revive domestic manufacturing. Trump has broadly wielded tariffs to penalize imports and spur domestic production and jobs. But manufacturers rely on global supply chains to produce finished goods in the US, exposing even domestic production to Trump’s duties.

Read more: US Nears Tariff Relief for Auto Industry After Lobbying Push

Some truckmakers fiercely lobbied for reductions and other stakeholders warned about the potential for sweeping tariffs to cause higher vehicle costs, which could also ripple through the construction and shipping industries. The USMCA exemption could potentially dull the impacts on Ram pickups made by Stellantis NV in Mexico, representing some of the roughly 245,000 medium- and heavy-duty trucks imported to the US last year, according to Commerce Department data.

Under the auto-tariff relief measure, carmakers can claim an offset worth 3.75% of the value of their American-made vehicles, which is meant to help blunt the cost of 25% duties on imported parts and provide time for supply chains to be shifted to the country.

While Trump initially planned a two-year phaseout for the offset, he’s now extending the initiative for five years, according to the officials. The engine program is also intended to cover the same timeframe.

The concession marks a win for companies including Ford Motor Co. and General Motors Co., which argued Trump’s trade policies advantaged some foreign competitors. That’s particularly true for cars made in Japan, which are subject to lower 15% tariffs under an agreement the country struck with the US, rather than the 27.5% rate they were previously charged under Trump.

“A level playing field with a stable and affordable supply chain will mean more growth in America and ultimately more job security and profit sharing for our front-line workers,” Ford CEO Jim Farley said in a statement.

The car part and truck tariffs are part of an expanding pool of levies Trump is wielding against a range of consumer goods — from steel and copper to lumber and upholstered furniture.

Trump has ordered the tariffs under Section 232 of the Trade Expansion Act, which empowers the levies to address imports deemed to threaten national security. The sectoral tariffs are distinct from country-based levies Trump has imposed using an emergency law — which two federal courts have ruled illegal. The Supreme Court is set to review the administration’s appeal next month.

(Updates with Ford CEO statement in 10th paragraph.)

To contact the reporters on this story:
Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net;
Skylar Woodhouse in Washington at swoodhouse15@bloomberg.net

To contact the editors responsible for this story:
Justin Sink at jsink1@bloomberg.net

Jordan Fabian, Derek Wallbank

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