Trucking braces for disruption in wake of Trump tariffs

In this article, you'll learn about:

• The current tariffs implemented by the Trump Administration
• The retaliatory tariffs from Canada, Mexico, and China
• How these tariffs may impact the trucking industry

The 25% tariffs against Canada and Mexico went into effect at 12:01 a.m. on March 4, with President Donald Trump also doubling the tariffs on Chinese imports to 20%. Canadian energy used in the U.S. is also getting taxed 10%. It didn’t take long for China and Canada to retaliate. China announced additional 10 to 15% tariffs on certain U.S. farm exports such as beef, chicken, wheat, and soy will take effect March 10, while Canada placed duties on $20 billion of U.S. goods, with more than $100 billion worth of U.S. goods subject to tariffs through the next three weeks.

Mexico has not issued any retaliatory tariffs as of yet.

According to the Census Bureau, cars and trucks and auto parts comprised $57 billion in Canadian  imports in 2023 and $177 billion from Mexico.  

Because Canada, Mexico, and China are the country’s three biggest trade partners, the political game of chicken has the trucking industry balking at the many potential implications.

Freight activity

American Trucking Associations responded quickly on Tuesday, with ATA President and CEO Chris Spear noting how the tariffs undermine recent progress in North American trade relations.

“With the success of USMCA and the growing trend of nearshoring, the North American supply chain has become highly integrated and supports millions of jobs,” he said. “Imposing border taxes on our two largest and most important trading partners will undo this progress and raise costs for consumers.”

Spear cited that some 100,000 U.S. truckers haul 85% of surface goods traded with Mexico and 67% with Canada.

“Not only will tariffs reduce cross-border freight, but they will also increase operational costs,” he said, noting these truckers “will bear a direct and disproportionate impact.”

New truck prices

New trucks costs are set to increase too, as several commercial vehicle OEMs manufacture in Mexico and Canada, with many assembly parts coming from China. ACT Research told Fleet Maintenance affiliate FleetOwner that Trump’s tariffs could increase the price of a heavy-duty truck by 8 to 10%. A prolonged trade war could overlap with the expected $20,000 to $30,000 price hike associated with MY2027 NOx emissions regulations. The EPA could possibly delay or rescind this rule, though. If both the tariffs and NOx rule stay in place, truck buyers would also feel an additional sting due to the 12% federal excise tax, which is based on the sales price.

“The price tag of a new truck could rise by up to $35,000, amounting to a $2 billion annual tax and putting new equipment out of reach for small carriers,” Spear said in his statement.

These costs would likely increase demand—and prices—in the used market as well.

Aftermarket

Before the tariffs became active, MEMA, The Vehicle Suppliers Association, urged Trump to reconsider and continue negotiations. The group acknowledged in a Feb. 28 letter to Trump that two primary reasons stated for tariffs—to improve border security and drug trafficking—were critical issues, but “across the board tariffs, however, would damage many businesses in the U.S. and lead to the unintended consequences of job loss at home and strain on global competitiveness within the vehicle supplier community.”

MEMA said vehicle suppliers provide 930,000 jobs in the U.S., and in a February survey of suppliers they found: “a significant majority of companies highlighted the existing fragility of the industry and noted the multiple challenges on the landscape such as margin pressure, supply chain disruptions, and stranded capital. They also expressed their grave concerns over the impact that the tariffs on Canada and Mexico could have on their businesses.”

In a Q4 2024 MEMA survey, these suppliers already reported decreases in new orders and production, with backlogs also declining and costs rising, according to the letter.

What’s next?

As FleetOwner previously reported, the tariffs could also benefit trucking. If manufacturers reshored production, U.S. logistics fleets would be responsible for far more truckloads than the few from ports to trains to warehouses needed for imports.

“If our friends at Amana in Iowa start building washing machines like crazy, there might be 400 truckloads that move to Amana Colonies with paint and steel and copper wire for the motors, etc., etc.,” explained Randy Flanagan, VP of sales for SAF-Holland. “That could potentially raise what we all do here.”

Building new factories takes time, though, and for now fleets should assume Americans will be more thrifty and the loads will decrease. Add in the additional costs for new equipment and all fleets really have control over is how they maintain their current equipment.

This means putting more energy into preventive maintenance and reducing diagnostic errors that lead to unnecessary parts replacements.

ATA is hopeful the current situation will be resolved sooner rather than later, as evidenced by Spear’s concluding statement:

"The longer tariffs last, the greater the pain for truckers as well as the families and businesses we serve. The Trump Administration knows our industry well and understands how vital trucking is to our economy and supply chain. President Trump proved his dealmaking skills during his first term by negotiating the USMCA. To prevent unnecessary economic pain, the trucking industry urges all parties to come to the table once again to swiftly reach a new agreement."