Trump Administration Adjusts Metals Tariffs, Imposes New Penalties On Trucks And Parts
In mid-October, President Donald Trump issued a proclamation that imposes new Section 232 tariffs on imports into the United States of trucks and truck parts. As the National Association of Manufacturers explained at this link, the order also modified the president’s March 8, 2025 proclamations that imposed Section 232 tariffs on steel and aluminum products.
Under the adjustment, the U.S. Secretary of Commerce may reduce steel and aluminum tariffs by up to half of the applicable rate, but no lower than 25 percent, for aluminum and steel producers that operate production facilities in Canada or Mexico and that supply U.S. auto or medium- and heavy-duty vehicles (MHDVs) producers. The aluminum and steel must qualify for United States, Mexico, Canada Agreement (USMCA) preferential tariff treatment and also must meet “smelting and cast” or “melted and poured” in Canada or Mexico rules. Additionally, the tariff adjustments must be limited to quantities of aluminum or steel “equal to newly committed U.S. production capacity” as determined by the U.S. Secretary of Commerce.
Meanwhile, the new penalties on trucks and parts, which will take effect Nov. 1, will apply to Class 3 through 8 vehicles, which include MHDVs, parts used to make those vehicles, as well as buses, motor coaches, and similar vehicles. (A full list of affected products is available at this link.)
Rates for MHDVs and their parts will be set at 25 percent; rates for buses and other vehicles will be set at 10 percent. The tariffs on MHDV parts will apply to key parts, including engines, transmissions, tires, and chassis. For trucks, but not buses, that qualify for USMCA treatment importers may provide documentation to the U.S. Department of Commerce identifying the amount of U.S. content in each imported truck model. The value of the U.S. content may be subtracted from the total value of the truck for the purpose of assessing the 25 percent tariff.
For MHDV parts that qualify for USMCA treatment, no Section 232 tariff will apply until the Commerce Department and the Bureau of Customs and Border Protection can establish a process to exclude U.S. content from the 25 percent calculation. Additionally, Section 232 tariff will apply to MHDV knock-down kits regardless of USMCA qualification.
The White House posted a fact sheet the provides more information about the proclamation.
As a reminder, MSCI presents all information regarding the Section 232 tariffs for its members’ information only.
In the past, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.
Click here to review all of MSCI’s advocacy on Section 232 tariffs.