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New U.S. Tariffs and Tax Credits Reshape Auto Industry

Trump administration imposes 25% tariff on heavy truck imports while extending financial relief for domestic manufacturers.

In a move to bolster U.S. manufacturing, the Trump administration has enacted a new policy combining significant tariffs on imported heavy vehicles with extended tax credits for domestic production.

Effective November 1, a 25% tariff will be applied to medium- and heavy-duty trucks and their parts imported on national security grounds. This action primarily targets Mexico, the largest source of such imports. A separate 10% tariff was also set for imported buses.

Simultaneously, automakers will receive an extended financial credit. The 3.75% tax credit on U.S.-assembled vehicles, which helps offset costs from other tariffs, has been extended through 2030 and broadened to include more parts and domestic engine manufacturing.

The administration states the measures protect domestic manufacturers like Peterbilt and Kenworth from foreign competition. However, the U.S. Chamber of Commerce criticized the tariffs, noting they target key allies that do not pose a security threat.

Major automakers, including Ford and GM, which have faced billions in tariff-related costs, will receive relief from the extended credits.

Compiled By: Target Blog News Media

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