United States President Donald Trump signed a decree on Friday imposing customs duties of 25% on trucks and 10% on buses and coaches, creating a new category of products affected by sectoral customs duties. The president announced at the end of September his intention to apply this new customs surcharge to trucks, initially scheduled for October 1. Incidentally, he added that it also concerns buses, which until now had not been mentioned.
Donald Trump thus extends the customs duties already existing in the automobile sector to these two categories of vehicles, as of November 1. This decision comes after an investigation by the Ministry of Commerce to determine whether the relocation of this industry represents a risk to the country’s national security, an approach used for all sectoral customs duties already in force.
These new customs duties, however, will not apply exclusively to trucks coming from Canada and Mexico, as long as their production meets the criteria established in the free trade agreement between the three countries (Aceum), said a US official. For the vehicles in question, only parts not manufactured in the United States will ultimately be subject to a 25% tax. But they remain exempt for the moment, while the Ministry of Commerce determines how to implement this tax. According to Capital Economics, the United States imports 78% of its trucks from Mexico and 15% from Canada.
On the other hand, for coaches and buses, the 10% will be applied entirely to vehicles coming from the two neighboring countries, whether or not they are within the framework of Aceum.
A request from the automobile industry
The White House took advantage of this decree to respond to the transition to a request from the automobile industry, extending until 2030 the deduction of 3.75% of the recommended price that manufacturers can apply to cars manufactured in the United States that contain imported parts. Initially planned for one year, this system was added at the request of the industry to reduce the impact of customs duties on car manufacturers. It will apply under the same conditions to trucks manufactured in the United States.
Canada and Mexico are among the first countries affected by US customs tariffs, a change initiated with Donald Trump’s return to the White House. Since then, both Mexico and Ottawa have attempted to negotiate new trade agreements with their neighbor, sometimes at the cost of trade tensions, particularly between Canada and the United States, without success so far. However, Mexico and Ottawa point out the limited impact of customs tariffs, ensuring that more than 80% of their products exported to the United States are precisely within the framework of Aceum.
Source: BFM TV
