WHAT ARE THE FINAL SECTION 232 IMPORT TARIFFS ON TRUCKS, PARTS, AND BUSES?
The White House has finalized Section 232 import tariffs on medium- and heavy-duty trucks, related vehicle parts, and buses following the Department of Commerce’s investigation into national security risks associated with foreign-sourced manufacturing. The proclamation establishes final tariff rates, preferential treatment under the United States-Mexico-Canada Agreement (USMCA), and offset mechanisms to support domestic production and investment.
WHAT IMPORT TARIFFS TAKE EFFECT UNDER SECTION 232?
Beginning November 1, 2025, the following tariffs will apply:
- 25 percent ad valorem duty on imported Class III through VIII trucks and their parts
- 10 percent ad valorem duty on imported buses, including school buses, city buses, and motor coaches
- 15 percent ad valorem duty on Japanese and European truck and engine parts
Used and remanufactured trucks and buses manufactured more than 25 years ago are excluded from the tariff measures. The tariff structure aligns with Section 232 automobile provisions issued earlier in 2025.
HOW WILL USMCA PREFERENTIAL TREATMENT APPLY TO TRUCKS AND PARTS?
The proclamation confirms that eligible imports from Canada and Mexico will receive favorable treatment under USMCA. For qualifying medium- and heavy-duty trucks, only the non-U.S. content will be subject to the 25 percent duty, while U.S. content will remain duty-free. Truck and bus parts imported from Canada or Mexico will continue to enter duty-free if they meet USMCA rules of origin. Commerce is expected to establish a methodology in the future to apply tariffs solely to the non-U.S. value of qualifying parts.
Buses, however, are not eligible for preferential treatment. The entire vehicle will be subject to the 10 percent duty rate.
WHAT IMPORT ADJUSTMENT OFFSETS ARE AVAILABLE TO U.S. MANUFACTURERS?
Medium- and heavy-duty vehicle manufacturers with U.S. assembly operations may claim an import adjustment offset of 3.75 percent of the manufacturer’s suggested retail price (MSRP) for each vehicle assembled domestically when equivalent tariffs have been paid on imported parts. Heavy truck engine manufacturers are also eligible for the same 3.75 percent offset. The program extends through 2030 and replaces a prior step-down plan that would have reduced offsets for automobiles beginning in 2026.
HOW DO METAL TARIFF ADJUSTMENTS SUPPORT NORTH AMERICAN PRODUCTION?
Aluminum and steel imported from Canada or Mexico that were smelted and cast, or melted and poured, in those countries may qualify for a reduced rate of 25 percent instead of the 50 percent rate applied to other sources. The Commerce Department will limit this adjustment to quantities equal to newly committed U.S. production capacity. The reduced rate applies to materials used in the manufacture of automobiles, trucks, and buses.
WHAT RULES APPLY TO FOREIGN TRADE ZONES AND TARIFF STACKING?
Goods subject to these tariffs that are admitted into a U.S. Foreign Trade Zone after the effective date must enter under privileged foreign status, ensuring that the duty applies when entered for consumption.
Tariff stacking will follow the same procedure established under Executive Order 14289 for automobiles and light trucks. Imports will remain “subject to” the Section 232 tariff, even if no duty is owed due to USMCA qualification or offset use.
HOW WILL DRAWBACKS AND EXCLUSIONS BE ADMINISTERED?
Manufacturing drawback claims will be limited to those filed under subsections (a) and (b) of section 313 of the Tariff Act of 1930. Drawback claims may reduce the available offset allowance but do not eliminate eligibility. CBP will administer offset credits and enforce compliance with declared U.S. content values under the guidance of the Department of Commerce.
WHAT STEPS SHOULD IMPORTERS AND MANUFACTURERS TAKE TO PREPARE?
Importers should review Harmonized Tariff Schedule of the United States (HTSUS) classifications for all affected products and confirm USMCA eligibility where applicable. Manufacturers with U.S. assembly operations should prepare documentation to support import adjustment offset applications. Companies sourcing metals or critical components from Canada or Mexico should evaluate qualification under the reduced-rate provisions for aluminum and steel inputs.
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