New Section 232 Tariffs on Trucks and Buses Take Effect; Offset Program Extended Through 2030

Starting November 1, 2025, new national security tariffs apply on imports of medium- and heavy-duty vehicles (MHDVs), certain vehicle parts (MHDVPs), and buses. This action follows a Presidential Proclamation aimed at strengthening national security and supporting domestic manufacturing. The new Section 232 duties will continue in effect until such time as they are expressly reduced, modified, or terminated.

Tariff Summary

• 25% Tariff: Applies to MHDVs (Classes III–VIII) and key truck parts including engines, transmissions, tires, and chassis.
• 10% Tariff: Applies to buses, including school, city, and motor coaches.
• Effective Date: Tariffs apply to goods entered for consumption or withdrawn from a warehouse on or after 12:01 a.m. EDT, November 1, 2025. The tariffs apply in addition to existing duties and fees.

Offset Program for Domestic Manufacturers

The Import Adjustment Offset Program has been extended through October 31, 2030, offering relief to U.S. manufacturers assembling MHDVs and engines domestically. This program allows manufacturers to reduce Section 232 tariffs on imported parts provided certain requirements are met and originally applied through April 30, 2027.

• Offset Rate: 3.75% of the manufacturer’s suggested retail price (MSRP) of finished vehicles if tariffs paid on imported parts reach that threshold.
• Eligibility: Applies only to vehicles and engines undergoing final assembly in the U.S. Imports of knock-down kits or equivalent part compilations are excluded.
• Use: Offset may be claimed by authorized importers of record to reduce tariff liability on qualifying parts.
• Review: Subject to ongoing evaluation by the Secretary of Commerce to ensure alignment with national security goals.

A separate rebate program is planned for U.S. producers of automobile and truck engines.

Preferential Treatment under USMCA

• Eligible Trucks: Only non-U.S. content is subject to the 25% tariff.
• Parts from Mexico or Canada: May enter duty-free if the parts qualify under USMCA rules of origin.
• Buses: Not eligible for USMCA benefits; subject to full 10% tariff.
• Valuation Methodology: Commerce has not finalized the method for determining non-U.S. value; qualifying parts from Mexico and Canada will continue to enter tariff-free until finalized.

Other Notable Provisions

• Steel and Aluminum Imports: imports from Canada or Mexico that are made with raw steel or aluminum smelted and cast or melted and poured, respectively, in those countries and used by U.S. car and truck manufacturers may qualify for a reduced 25% tariff—instead of the standard 50% rate. This preferential rate is subject to limitations set by the Secretary of Commerce.
• Drawback Claims: the new rules permit drawback claims under subsections (a) and (b) of Section 313 of the Tariff Act of 1930. However, manufacturers should note that such claims may reduce the offset allowances available under the import adjustment program.
• Stacking Rules: the stacking methodology previously applied to cars and light trucks will now extend to trucks and buses.