US auto tariffs: Donald Trump offers American car makers additional relief; truck parts face 25% duty

US President Donald Trump on Friday signed an order that provides relief for American carmakers while introducing a 25% tariff on truck parts.The White House said the order extends an arrangement allowing companies to reduce tariffs on imported vehicle parts. At the same time, it imposes a 25% tariff on medium and heavy-duty trucks and their parts, starting November 1.The moves follow a Section 232 investigation this year into truck imports, launched to assess their impact on national security. Trump has previously used such investigations under the Trade Expansion Act of 1962 to impose tariffs on goods ranging from steel and aluminium to autos. The goal is to encourage domestic manufacturing and penalise countries he believes are taking advantage of the US.Currently, firms importing parts for vehicles built in the US can offset 3.75% of a car’s list price. This benefit was due to be gradually reduced and then ended, but the new order extends the 3.75% offset through 2030 without change. A similar system will now apply to medium and heavy-duty trucks. Officials cited by AFP said that the measures are designed to reward US-based production.Despite the new 25% tariff on imported trucks, senior US officials told journalists some trucks will still get preferential treatment under the US-Mexico-Canada Agreement (USMCA). Around 78% of heavy truck imports come from Mexico and 15% from Canada, according to Capital Economics. Under the new rules, only the non-US content of USMCA-eligible trucks will face the tariff. Eligible parts will enter duty-free until the Commerce Department sets rules to assess their non-US content.Imported buses will face a 10% tariff and will not qualify for USMCA benefits, officials added.The tariffs come amid ongoing trade talks with Canada and Mexico. The levies are already affecting Mexico, with exports of heavy vehicles to the US dropping nearly 26% year-on-year between January and August.