US heavy-duty truckmakers are facing mounting financial pressures as the Trump administration’s trade policies have led to inflated production costs of between 2-4% across the US$50bn industry. According to Reuters, import levies on essential materials and components are prompting companies to explore alternative sourcing strategies—in particular, an increased reliance on Mexican suppliers eligible for preferential treatment under the US-Mexico-Canada trade agreement (USMCA).
In June, the Trump administration implemented enhanced import duties of 50% on steel, aluminium and copper derivatives, doubling the previous rates of 25% under Section 232 national security provisions. These measures have substantially impacted truckmakers that rely on imported raw materials and finished components to assemble their products domestically.
USMCA creates competitive advantages for companies utilising Mexican production facilities, allowing for the duty-free movement of goods meeting regional content requirements of 64% North American sourcing (rising to 70% by 2027). This framework has enabled truckmakers like Daimler and Traton to circumvent tariff exposure through cross-border operations, while maintaining market access and a US production footprint.
Analysis by Bernstein has indicated that additional costs under the new tariff regime have created a roughly 3% pricing disadvantage for wholly US-assembled vehicles compared to USMCA-compliant Mexican alternatives. ACT Research found that the latest tariffs add an estimated 2-4% to per-unit costs.
