OEMs Move Forward With Truck Tariffs Ahead
Paccar Expects Bigger Market Share Due to Section 232 Truck Tariffs
Key Takeaways:
- The White House on Oct. 17 detailed its plan to impose 25% tariffs on imported medium- and heavy-duty trucks starting Nov. 1, with exemptions for USMCA-qualified vehicles.
- Paccar expects to benefit from the tariffs as its U.S. plants reduce exposure to import duties, even as industry leaders warn the policy could raise truck prices and slow purchases.
- Analysts said the measures aim to boost domestic manufacturing while offering offsets for U.S. assembly through 2030, though weak freight demand remains the sector’s main challenge.
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The White House on Oct. 17 provided on its plans for new tariffs on imported trucks, and at least one truck manufacturer is preparing to capitalize on the change.
Paccar, the parent company of Peterbilt and Kenworth, expects to seize a bigger U.S. heavy-duty truck market share and to be able to increase prices once the Section 232 import tariffs on medium- and heavy-duty trucks and parts go live Nov. 1.
The clarity ended three weeks of elevated uncertainty for carriers, truck makers and market observers following a Sept. 25 social media post by President Donald Trump.
Bellevue, Wash.-based Paccar’s logic is that its brands will be less affected by the tariffs than its peers.
Imported Classes 3-8 trucks and parts received a 25% tariff as expected, but trucks that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement will be exempt.
The plan also includes an offset to the tariffs for medium- and heavy-duty truck parts equal to 3.75% of the aggregate value of all trucks assembled in the U.S. from 2025 through 2030.
The Department of Commerce in April launched an investigation to determine “the effects on the national security of the imports of medium-duty trucks, heavy-duty trucks, and medium- and heavy-duty truck parts.”
“I think it helps Paccar significantly, and that should be good for our customers and Paccar. I think it gives us a competitive leg up from where we’ve been,” Paccar CEO Preston Feight said Oct. 21.
“We feel like we can gain share and we feel like we have the capacity to support gaining share in the coming time frame,” Feight told analysts during the company’s third-quarter 2025 earnings call.
Paccar posted net income of $590 million, or $1.12 per diluted share, in the most recent quarter, down 39.3% compared with $972.1 million, $1.85, in the same period a year earlier.
“One of the things I’m really pleased with our manufacturing team over the last couple of years is we’ve made these big investments into the factories so that we have capacity to handle what ends up happening in quarterly swings and build,” Feight told analysts.
“You’re always, as a company, trying to provide great trucks, great transportation solutions for your customer, and then be paid fairly for them. Nothing is different in the environment we’re in today than that, right? We want to keep providing these great trucks and transportation solutions. As we do that, we think our customers are happy to pay us fairly for them. As cost goes down, that should bring some benefit to them, and that should bring some market share opportunity to us, we hope,” he added.
Paccar, in comments filed with Commerce in May as part of the investigation, cautioned against tariffs on parts manufacturers, but backed tariffs on fully completed trucks built overseas.
Peterbilt and Kenworth operate truck assembly plants in Renton, Wash., Chillicothe, Ohio, and Sainte-Thérèse, Quebec. Engines are manufactured in Columbus, Miss.
The two truck makers won a 30.9% share of U.S. Class 8 retail sales in 2024, according to Wards Intelligence data.
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Paccar’s peers did not find analysts quizzing their top executives so soon after the White House issued the fact sheet.
Volvo Group — which like Paccar does not operate a Mexican production plant — issued its own Q3 earnings earlier on Oct. 17.
“We’re still reviewing the announcement, but we very much appreciate the relief the administration is providing on imported parts for U.S. producers like us, who can’t presently source certain parts in this country,” a spokeswoman told Transport Topics.
Daimler Truck North America, parent company of Freightliner and Western Star, and International Motors were more circumspect.
“We are carefully reviewing the president’s proclamation regarding Section 232 tariffs on trucks and buses assembled outside the United States to understand the potential implications for our customers, operations, employees and supply chain partners,” a spokesman said.
“We look forward to working with the administration to ensure that we fully understand the framework and its impact on manufacturing,” he added.
International builds the company’s full Class 8 lineup at its Escobedo, Mexico, plant. DTNA owns two plants in Mexico: Saltillo and Santiago Tianguistenco. Freightliner Cascadias — the top-selling Class 8 tractor in the U.S. — are built in Saltillo.
“The team is still carefully reviewing the latest information,” said a DTNA spokeswoman.
Carriers Face Another Headwind
Industry stakeholders offered cautious welcomes, despite the extra information now circulating.
“We’ll be assessing the impact on truck prices, as rising operational costs continue to hamstring our industry at an extremely challenging time for the freight market,” said American Trucking Associations spokesman Evan Fallor.
“We’re also calling for a repeal of the federal excise tax on trucks, and more regulatory relief from [the Environmental Protection Agency], both of which would immediately alleviate the cost pressures facing truckers right now,” Fallor added.
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American Truck Dealers President Jacqueline Gelb told TT: “The truck industry continues to experience an extended down market driven by economic uncertainty, higher equipment costs and lack of regulatory clarity. Policies that impact overall truck costs could prolong current conditions and delay new trucks entering commerce.”
“ATD stands ready to partner with the government to identify initiatives that would spur vehicle investment, such as repealing the 12% federal excise tax on new trucks and finalizing regulations that will provide certainty for future model years,” Gelb added.
Some fleet executives have been less cautious in recent weeks, though.
“Trucks will be more expensive at a time when we can least afford it,” Werner Enterprises CEO Derek Leathers told the Wex OTR Summit in San Antonio on Oct. 2. Werner ranks No. 18 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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“All the OEMs, regardless of where they’re doing their final manufacturing, will have to compete in the marketplace with those that may be doing more domestic versus across the border,” Ryder System CEO Robert Sanchez warned during the company’s Oct. 23 earnings call.
“Any increase that we see, obviously, we pass through in our lease rate with our customers. We’re not buying trucks until we have signed leases. Those increases will likely, if they do happen, slow down the purchase of new trucks, I would expect, which should accelerate getting the supply of trucks in the market down to where they need to be,” Sanchez added.
Ryder ranks No. 6 on the for-hire TT100, with Ryder Dedicated Transportation Solutions ranking No. 5 among truckload/dedicated carriers.
Analysts, meanwhile, are combing through the fine print, but saw little that was alarming.
“It’s good to finally have further clarity now that the White House has released more details on the Section 232 tariffs,” said FTR Transportation Intelligence Senior Analyst for Commercial Vehicles Dan Moyer.
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“The 25% duty on imported heavy- and medium-duty trucks and key components is significant, but the exemptions for USMCA-qualified content and the offset program for U.S. assembly help soften the overall impact some,” Moyer said, adding: “Overall, the structure seems intended to encourage domestic production while cushioning the immediate market effect.”
“My sense is that this clarification essentially leaves the playing field unchanged, for now,” ACT Research Vice President Steve Tam said Oct. 20, while adding that there was still a lot to be digested.
“We think that they represent rather more ‘evolution’ from the recent status quo than a sharp break,” S&P Global Mobility Executive Director, Global Heavy Truck Research Andrej Divis said.
“Although there are additional new details [such as the offset], our view is that the new tariff structure is similar enough to the old one to expect similar pressures and opportunities for the business of manufacturing medium- and heavy-duty trucks,” Divis said in an email, adding: “Right now, we see weak commercial vehicle demand as being a greater headwind to manufacturers of medium- and heavy-duty trucks than the latest truck tariff announcement.”
