U.S. President Donald Trump signed an executive order today slapping a 25 per cent tariff on imported medium- and heavy-duty trucks beginning Nov. 1, with a carveout for vehicles traded under the Canada-U.S.-Mexico Agreement.
Trump is also giving U.S. automakers additional relief from tariffs on auto parts, extending what was supposed to have been a short-term rebate until 2030.
The amended action provides a rebate of 3.75 per cent relative to the sales price of a domestically assembled vehicle. That figure was reached by putting the 25 per cent import tax on parts that make up 15 per cent of a vehicle’s sales price. Multiplying those two percentages together is equal to 3.7 per cent.
The rebate will also now be offered to manufacturers of trucks and engines, officials said.
WATCH | Ottawa threatens to sue Stellantis for moving Jeep production to U.S. :
Ottawa threatens to sue Stellantis for moving Jeep production to U.S.
Industry Minister Mélanie Joly threatened legal action over automaker Stellantis’s plan to move production of the Jeep Compass to the U.S. on Wednesday, saying that Stellantis agreed to maintain its ‘full Canadian footprint, including Brampton’ when accepting financial supports from Ottawa. Canadian Vehicle Manufacturers’ Association president Flavio Volpe argues Ottawa should withhold billions in subsidies for Stellantis’s Windsor, Ont., battery plant unless the company resumes vehicle production at its Brampton Assembly, saying ‘we shouldn’t let them off the hook — Donald Trump isn’t the only bully around.’ Plus, Newfoundland and Labrador premier-designate Tony Wakeham responds to concerns about his approach to the province’s tentative hydroelectric deal with Quebec.
Trucks compliant with the trade agreement, better known as CUSMA, will be tariffed only on their non-American parts.
The latest levies will not hit auto parts that are compliant under the North American trade pact for now.
A 10 per cent tariff will be placed on buses and motorcoaches.
Trump threatened the heavy truck levies last month, saying it would protect American industry from outside competition.
Trump used Section 232 of the Trade Expansion Act of 1962 to impose the latest truck tariffs — which will hit semi-trailers and big pickup trucks — mirroring the levies he had already slapped on smaller automobiles earlier this year.
It adds to a growing list of sector-specific duties that include steel, aluminum, copper and lumber.
Trump threatened the heavy truck levies last month, saying it would protect American industry from “unfair outside competition.”
“President Trump is fortifying America’s ability to manufacture medium- and heavy-duty trucks and essential parts, which is vital for America’s military readiness, emergency response capabilities and critical infrastructure for economic activity,” the White House fact sheet said.
The American Trucking Association has voiced its opposition to the duties, saying it could drive up prices in an industry that is already being slammed by steel and aluminum tariffs.
In a May submission to the government, it said the American trucking industry operates on thin margins and was in a freight recession for years, with falling rates and increased costs for operating trucks.
The trucking lobby group wrote that it “does not believe that the importation of heavy-duty trucks poses a national security threat, as outlined below.”
The North American automobile industry is deeply integrated and many of the trucks were already being made in the United States with parts from other countries.
The effects of the latest tariffs are more likely to be felt in Mexico — although some heavy- and medium-duty vehicle companies do have operations in Canada.
Paccar, which produces large commercial trucks, has divisions in Canada. It laid off employees at its Ste-Therese, Que., plant in August.
