Heavy Trucks: A Complex Market and Impact of New Tariffs

A new 25 percent tariff on imported heavy trucks took effect on Oct. 1.

Freight trucks pass through customs before entering the United States at the Otay Mesa port of entry in San Diego. John Moore/Getty Images/File Photo

A new 25 percent tariff on imported heavy trucks took effect on Oct. 1. It is expected to benefit domestic manufacturers while putting pressure on foreign producers and freight companies. However, given the complexity of the industry, assessing the full impact of the tariff could be challenging.

President Donald Trump made the announcement in a Sept. 25 Truth Social post, emphasizing that the purpose of the measure was to protect domestic manufacturers from “unfair” foreign competition and support truckers for both economic and national security reasons.

“Therefore, our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others, will be protected from the onslaught of outside interruptions,” the president wrote.

“We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!”

Trump’s decision comes roughly five months after the Department of Commerce initiated an investigation into the effects on national security of imports of medium and heavy trucks, their parts, and derivative products, under Section 232 of the Trade Expansion Act of 1962.

Heavy-Truck Landscape

Trucks play a crucial role in the U.S. economy, moving nearly two-thirds of the nation’s freight by weight, according to data compiled by the American Trucking Associations.

The heavy-truck manufacturing industry is a diverse sector producing long-haul tractors, heavy-duty recreational trucks, medium-duty trucks, and powertrain and related systems.

It is also a complex industry, as domestic brands, such as PACCAR, own foreign manufacturing facilities, and foreign truck makers—including Daimler and Volvo—own domestic brand names and operate large-scale manufacturing facilities both within and outside the United States.

Global Market Insights valued the market for heavy trucks, also known as Class 8 trucks, at $265.9 billion in 2024 and expects it to grow at a compound annual growth rate of 4.5 percent between 2025 and 2034.

The market is highly concentrated. Seven brands from four global companies account for 99.9 percent of all new Class 8 truck sales in the United States. The traditional trucking original equipment manufacturers—companies that manufacture trucks, engines, or major truck components—continue to dominate the long-haul fleet market.

Major industry brands include PACCAR, parent company of Kenworth, Peterbilt, and DAF; Daimler Truck, parent company of Freightliner and Western Star; Volvo Group, parent company of Volvo Trucks North America and Mack; and Traton, which owns Navistar.

All these brands have operations both in the United States and overseas. PACCAR, for instance, with roots dating back to the early 1900s—the origins of the U.S. automobile industry—owns factories in the UK and Brazil.

A recent PACCAR earnings report states that the company produces more than 90 percent of its trucks for U.S. customers at its factories in Ohio, Texas, and Washington.

The Sweden-based Volvo Group has manufacturing operations in Sweden and the United States. It stated that “every Volvo truck is assembled in the Volvo Trucks New River Valley assembly plant in Dublin, Virginia.“

The situation is similar for its U.S. partner Mack Trucks, which stated that “Mack trucks, diesel engines, and transmissions sold in North America are assembled in the United States.”

Traton SE—a global trucking group owned by Volkswagen Group—owns the American brand Navistar, a manufacturer of trucks and buses with operations in the United States, including Springfield, Ohio, and San Antonio, as well as in Escobedo, Mexico.

However, the company doesn’t provide any clear information on what percentage of the trucks sold in the United States are manufactured at home.

These cross-country partnerships make it challenging to assess the overall effects of tariffs on the industry and domestic manufacturing.

Mixed Reactions

The financial markets responded to the Sept. 25 tariff announcement unevenly.

Shares of most domestic manufacturers, such as PACCAR, rose, while those of foreign-based firms, including Traton SE and Daimler Truck Holding AG, fell. Freight operators such as Old Dominion Freight Line also registered losses amid concerns about higher operating costs.

Economists and industry specialists are divided over the effects of the tariffs. However, they generally agree that the long-term effects will depend on how manufacturers adapt their supply chains and whether trade partners choose to retaliate.

Georgios Koimisis, professor of economics and finance at Manhattan College, said higher costs will likely delay fleet upgrades, raise repair expenses, and hit small trucking companies hardest.

“Many fleets will delay buying new vehicles and instead will keep their older ones on the road for a longer time, which will likely lead to more breakdowns and higher repair bills,” he told The Epoch Times.

“If key parts are imported, they may be harder to find, which in turn will slow repairs and deliveries.”

Koimisis said he believes that small trucking companies, which are already operating on thin margins, are likely to be most affected and may pass some of the increase on to shipping rates.

In addition, he said he believes that consumers may face slightly higher delivery costs and less reliable service and that it may take a considerable amount of time before any benefits materialize.

Doug Burnetti, an attorney and auto industry expert, said that U.S. manufacturers still rely heavily on imported components, meaning tariffs could disrupt supply chains and drive up costs that ultimately reach consumers.

“Even the firmly ‘American’ domestic manufacturers tend to source key components like engines and electronics from international partners,” he told The Epoch Times. “Over the long term, the industry may adjust by diversifying suppliers or investing in more U.S.-based production, but that’s going to take years of capital spending and workforce development.”

Burnetti also said that higher tariffs will translate to higher costs for manufacturers, which generally get passed down through increased sticker prices, costlier repairs, and reduced availability.

Bill Currence, founder and managing partner at Cornerstone Consulting Organization, suggested that while tariffs may put short-term pressure on margins because of higher costs for imported steel, castings, and components, the strongest players are not standing still—they are investing in automation, implementing innovative labor incentive programs, and boosting operational speed to improve cash flow.

“These proactive steps mean that when the market rebounds—as many expect within six to eight months—those companies will be ready to capitalize,” he told The Epoch Times. “The tariffs may sting now, but they’re accelerating the shift toward a more efficient and resilient U.S. trucking supply chain.”