Tariffs Reshape the Heavy Truck Market in 2025

[MikePhua]

A new 25% tariff on imported medium and heavy-duty trucks, effective November 1, 2025, is already reshaping the U.S. logistics and construction equipment landscape. The policy, announced by President Trump, targets all foreign-built trucks entering the United States, with particular impact on imports from Mexico, Canada, Japan, Germany, and Finland. These countries collectively account for the majority of truck imports, valued at over $20 billion annually.
Scope and Legal Basis of the Tariff
The tariff was enacted under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose trade restrictions for national security reasons. The administration cited concerns about foreign dominance in the truck manufacturing sector and its potential impact on domestic supply chains. The move follows earlier investigations by the U.S. Commerce Department and builds on existing duties for light-duty trucks.

• Medium-duty trucks: Gross vehicle weight between 14,000 and 33,000 pounds
  
• Heavy-duty trucks: Vehicles exceeding 33,000 pounds, including Class 8 tractors and vocational chassis
  
• Tariff rate: 25% applied to the declared import value
  

Immediate Market Effects

• Price increases: Imported trucks now cost 9–17% more depending on configuration and origin
  
• Demand shift: Domestic manufacturers like Freightliner, Kenworth, and Peterbilt report stronger order books
  
• Used truck values: Prices for late-model domestic trucks have firmed, especially in vocational specs
  
• Fleet planning: Carriers are delaying capex or switching to U.S.-built alternatives to avoid tariff costs
  

A fleet manager in Ohio noted that his company canceled a 12-unit order from a Canadian supplier and reallocated budget toward refurbished domestic units. Meanwhile, a construction firm in Texas reported delays in receiving imported dump chassis, forcing them to rent older equipment at higher rates.
Impact on Manufacturers and Supply Chains

• U.S. OEMs: Companies like Daimler Truck North America and PACCAR stand to gain market share, though they face pressure to ramp up production and meet EPA 2027 emissions targets
  
• Foreign suppliers: Mexican and Canadian plants, which previously enjoyed NAFTA exemptions, now face uncertainty unless carveouts are negotiated
  
• Parts logistics: Cross-border bottlenecks are emerging as suppliers reroute components to avoid tariff zones
  

Some manufacturers are exploring localized assembly to bypass tariffs, while others are lobbying for exemptions. The U.S. Chamber of Commerce and several trade groups have voiced opposition, citing the risk of retaliatory tariffs and supply chain disruption.
Strategic Recommendations for Equipment Buyers

• Audit sourcing channels to identify tariff-exposed suppliers
  
• Negotiate delivery terms that account for potential delays or cost increases
  
• Consider domestic alternatives even if lead times are longer
  
• Monitor policy updates for exemptions or changes in enforcement
  
• Invest in maintenance and refurbishment to extend the life of existing fleet assets
  

Conclusion
The 2025 truck import tariff marks a significant shift in U.S. trade policy, with ripple effects across construction, logistics, and industrial sectors. While intended to protect domestic manufacturing, the short-term impact includes price inflation, procurement delays, and strategic realignment. Companies that adapt quickly—by diversifying sourcing, extending fleet life, and leveraging domestic suppliers—will be best positioned to weather the transition.