The truck industry in the US is facing significant challenges due to high tariffs on imported raw materials, leading to changes in production strategies.
Tariffs and Their Impact on Manufacturers
Truck manufacturers in the US are facing 50% tariffs on imported steel, aluminum, and copper derivatives under Section 232 of the Trade Expansion Act. These additional costs are squeezing domestic production while competitors building in Mexico avoid many of the levies and gain a pricing advantage.
Shifting Production Capacities to Mexico
Many manufacturers, including Daimler Truck and Traton, are increasing their manufacturing footprint in Mexico to take advantage of benefits offered by the US-Mexico-Canada Agreement (USMCA). This agreement allows goods to move duty-free among the three countries if they meet set regional sourcing thresholds.
Industry Outlook and Future Trends
ACT Research forecasts an 11% decline in truck production by 2026 due to economic headwinds. Additionally, the overall assembly costs of trucks are expected to rise due to tariffs, prompting manufacturers to focus on reducing costs and optimizing production processes.
Current tariffs and economic conditions are significantly impacting the US truck industry, prompting manufacturers to re-evaluate their strategies and shift some production to Mexico.
