10% Tariff on Buses
Effective from November 1
U.S. President Donald Trump has officially ordered the imposition of a 25% high tariff on medium and large trucks imported into the United States, effective from November 1 of next month.
The White House announced on the 17th (local time) that President Trump signed a proclamation imposing new tariffs on medium and large trucks and buses. As a result, starting November 1, a 25% tariff will be applied to medium and large trucks and related parts, while buses will be subject to a 10% tariff.
The White House explained that this measure is based on Section 232 of the Trade Expansion Act, which aims to restrict the inflow of imports that could threaten national security. The rationale is that medium and large trucks are used for military troop transport and disaster response, and account for 70% of domestic logistics in the United States, making it necessary to protect domestic manufacturing capabilities. Currently, about 43% of medium and large trucks sold in the United States are imported.
Medium trucks refer to vehicles with a gross weight of 14,001 pounds (about 6.35 tons) to 26,000 pounds (about 11.79 tons), while large trucks are those over 26,001 pounds. Smaller vehicles, such as passenger cars and light trucks, have already been subject to a 25% tariff since April of this year.
This truck tariff does not overlap with existing item-specific tariffs on products like steel and aluminum, and it is highly likely to be applied equally to Japan and the European Union (EU), which have existing agreements to lower automobile tariffs.
President Trump has also expanded the existing tariff offset program to reduce the burden on auto parts importers. This program reimburses a portion of the 25% tariff in the form of credits for vehicles assembled in the United States. The application period, previously two years, has been extended by five years until April 30, 2030, and the offset rate will be fixed at 3.75% of the vehicle's manufacturer's suggested retail price (MSRP) for five years.
The administration also plans to introduce a similar tariff relief policy targeting manufacturers of medium and large truck parts and engines.
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