Daijiworld Media Network - Washington

Washington, Oct 18: US President Donald Trump on Friday signed an executive order extending an arrangement that allows automakers to reduce tariffs on imported vehicle parts. The move formalizes a new 25-percent tariff on imported medium and heavy duty trucks and parts, effective November 1.

The announcement follows a Section 232 investigation launched this year into truck imports to assess their impact on national security. The tariffs are part of Trump’s broader strategy under the Trade Expansion Act of 1962 to encourage domestic manufacturing and penalize countries deemed to be taking advantage of the US.

Under the extended program, companies importing parts for vehicles assembled in the United States can continue offsetting 3.75 percent of a vehicle’s list price until 2030, maintaining the percentage without reduction. A similar offset scheme is also being established for medium and heavy duty trucks through 2030, designed to support US-based production.

While imported trucks face the new duty, senior officials said favorable treatment will be available for vehicles qualifying under the US-Mexico-Canada trade agreement (USMCA), affecting mostly Mexico- and Canada-sourced trucks. Trucks meeting USMCA requirements will see only their non-US content taxed at 25 percent. Imported buses will face a 10-percent tariff, with no USMCA exemptions.

Trade tensions have already impacted Mexico, with heavy vehicle exports to the United States declining nearly 26 percent between January and August this year.