On October 17, 2025, the Trump Administration released a significant proclamation imposing new Section 232 duties on medium- and heavy-duty vehicles (MHDVs) (such as trucks); MHDV parts; and buses. These changes further expand tariff coverage over sectors critical to U.S. industrial capacity and national security, and bring a few new complexities to both importers and domestic manufacturers.
A fact sheet regarding the tariffs can be found here.
The tariffs take effect starting on November 1, 2025.
1. Tariff Rates and Scope
The new proclamation covers MHDVs (which include Class 3 to Class 8 vehicles such as large pickup trucks and box trucks), along with key parts like engines, transmissions, and tires as designated in Annex I. Covered items will be subject to a 25 percent tariff as of November 1. Additionally, buses and similar vehicles, including school and transit buses and motor coaches, classified under HTSUS 8702, are subject to a 10 percent tariff.
These tariffs do not apply to MHDVs and buses that were manufactured 25 years before entry into the United States.
Importantly, domestic stakeholders will be able to request additional MHDV parts to be within the scope of these tariffs. This is the same kind of process we have seen for earlier Section 232 cases, enabling U.S. producers an opportunity to request expansion of the scope of the tariffs.
2. United States-Mexico-Canada Agreement (USMCA) Treatment
Similar to the Section 232 automobile proclamation, importers of qualifying USMCA MHDVs (except buses under 8702) may submit documentation detailing the proportion of U.S. content in each model. In such cases, the 25 percent tariff would then apply solely to the non-U.S. portion of the vehicle's value.
MHDV knock-down kits or similar parts collections always face the full additional tariff, regardless of USMCA qualification.
MHDV parts that qualify under USMCA will also not be subject to the 25% tariff until CBP establishes a process for calculating non-U.S. content and publishes a notice to that effect.
3. Import Adjustment Offset for U.S. Assembly
Manufacturers that complete the final assembly of MHDVs in the United States are eligible for an import adjustment offset. This offset allows them to reduce any Section 232 tariffs owed on imported MHDV parts. The offset amount can be as much as 3.75% of the total value of MHDVs assembled domestically, providing an opportunity to lower overall tariff liability for qualifying manufacturers.
This offset program will run from November 1, 2025 through October 31, 2030.
The same offset structure also applies to MHDV engine manufacturers. Additionally, the program aligns with and extends the automobile offset provisions under Proclamation 10925; automobile manufacturers affected by that proclamation can now offset a portion of tariffs on automobile parts, up to 3.75% of the Manufacturer's Suggested Retail Price of vehicles they assemble in the United States, through 2030.
It is important to note that neither MHDV nor automobile knock-down kits, or similar parts compilations, are eligible for these offset programs. Furthermore, the Department of Commerce retains the authority to revoke the import adjustment offset for specific products if it determines that the program conflicts with national security objectives.
4. Tariff Stacking Rules
Products covered by this proclamation follow established stacking practices for automobiles and auto parts. If a product is subject to Section 232 auto or auto parts tariffs, or the new MHDV and truck parts tariffs, it is not simultaneously subject to other Section 232 tariffs, nor to the International Emergency Economic Powers Act (IEEPA) reciprocal tariffs, or the IEEPA tariffs concerning Canada, Mexico, Brazil, or India. However, the IEEPA fentanyl tariff on China will still apply.
Importantly, even where a tariff is not owed—whether due to USMCA origin compliance, offset adjustments, or reductions through security or trade agreements—the product remains "subject to" the proclamation, and thus excluded from additional tariffs.
Of course, that means we now have two definitions of subject to! As our readers may recall under the tariff stacking rules, "subject to" also means that a duty more than 0% is owed under the tariff action. See CSMS # 65236574 (Jun. 3, 2025).
5. Reduced Aluminum and Steel Tariffs for USMCA-Qualifying Suppliers
Notably, the proclamation also provides up to a 25 percent reduction in steel and aluminum tariffs for aluminum or steel producers that operate production facilities in Canada or Mexico and supply United States automobile or MHDV manufacturers. However, this reduction will only be limited to quantities of aluminum or steel that support new U.S. production capacity. Further, only imports that qualify for preferential treatment under the USMCA, and that were actually smelted and cast or melted and poured in Canada or Mexico, can benefit from this lower tariff.
But the addition of this tariff reduction indicates that the Trump Administration is attempting to create a domestic ecosystem in the steel, aluminum, automobile, and MHDV industry sectors.
6. Chapter 98 HTS Exception
As with previous Section 232 proclamations, goods that are claimed under certain provisions in Chapter 98 of the HTSUS may be exempt from the MHDV/MHDV parts tariff. However, for entries under HTS 9802.00.60, the Section 232 duties must be calculated on the full value of the imported item.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
