October 20, 2025
Prepared by the J.O. Alvarez, Inc. Compliance Team

The White House has issued a new proclamation under Section 232 of the Trade Expansion Act of 1962, imposing additional tariffs on imports of medium- and heavy-duty trucks, truck parts, and buses. The measure—announced October 17, 2025—is intended to strengthen U.S. supply chains, increase domestic manufacturing, and promote national security.

At J.O. Alvarez, Inc., we are monitoring the implementation of this action closely and summarizing below the key elements, timing, and potential impact for importers and manufacturers.

🔹 Overview of the Tariffs

Effective date:
Applies to goods entered for consumption (or withdrawn from warehouse) on or after 12:01 a.m. EDT on November 1, 2025.

New tariff rates:

• 25% tariff on imports of medium- and heavy-duty trucks and certain truck parts

• 10% tariff on imports of buses, including school buses, transit buses, and motor coaches

🔹 Scope and Coverage

Medium- and Heavy-Duty Vehicles (MHDVs):
Covers Class 3 through Class 8 trucks—including large pickup trucks, cargo and moving trucks, dump trucks, and tractors for eighteen-wheelers.

Truck Parts (MHDVPs):
Applies to key components such as engines, transmissions, tires, and chassis.

Buses:
Includes all vehicles classified under HTS 8702.

🔹 USMCA Treatment

For USMCA-eligible vehicles and parts:

• The 25% duty applies only to the non-U.S. content in the vehicle (rather than its total value).

• USMCA-compliant truck parts will be temporarily excluded from the new tariff until the Department of Commerce (DOC), in coordination with U.S. Customs and Border Protection (CBP), defines the process for calculating the non-U.S. content portion.

🔹 Offset / Incentive Program for U.S. Manufacturers

To encourage domestic assembly, the proclamation establishes an “Import Adjustment Offset Program.”

• Manufacturers assembling medium- or heavy-duty trucks in the U.S. may offset 3.75% of the total value of all trucks produced domestically between 2025 and 2030.

• This offset reflects the duty that would otherwise be due if 25% were applied to 15% of a vehicle’s value.

• A parallel offset applies to engine manufacturers based on the value of U.S.-assembled engines.

This incentive structure is designed to mitigate tariff exposure for companies producing within the U.S. while maintaining competitive balance with importers.

🔹 Alignment with Automotive Tariff Policy

The proclamation harmonizes the new heavy-duty vehicle program with existing automobile tariff measures under Section 232. Passenger vehicle manufacturers will also continue to receive a similar 3.75% offset through 2030.

Products covered under this proclamation will not be subject to additional sectoral tariffs (such as those on steel, aluminum, copper, automobiles, auto parts, or lumber), nor to reciprocal tariffs targeting Canada, Mexico, Brazil, or India.

⚙️ Potential Impact and Next Steps for Importers

1️⃣ Review Import Exposure
Identify any upcoming imports of trucks (Class 3–8), buses, or key components expected to arrive after November 1.
Reassess country-of-origin documentation and confirm USMCA qualification where applicable.

2️⃣ Evaluate Cost Impact
Incorporate the new duty rates into landed-cost calculations and review existing purchase agreements or delivery schedules.

3️⃣ Monitor U.S. Content Documentation
Properly tracking U.S.-origin content will be critical for claiming USMCA benefits or future DOC offsets.

4️⃣ Prepare for CBP Guidance
Expect further clarification from CBP and DOC on valuation methodology for parts with mixed origin.
Our compliance team will issue a follow-up bulletin once procedures are announced.

5️⃣ Adjust Supply-Chain Strategy
Manufacturers and importers may wish to explore alternative sourcing or increase U.S. assembly operations to benefit from offset incentives and reduce tariff exposure.

📩 Stay Informed

J.O. Alvarez, Inc. will continue to monitor CBP implementation guidance and related tariff actions.
Follow our blog at www.joalvarez.com or email joacompliance@joalvarez.com to receive updates directly from our compliance team.

Prepared by the J.O. Alvarez, Inc. Compliance Team
For informational purposes only. This summary is not legal advice. For case-specific guidance, please contact your legal or trade-compliance advisor.