On October 17, 2025, President Donald Trump issued Proclamation 10984 announcing that, effective November 1, 2025, the United States will begin levying a 25% tariff on medium- and heavy-duty vehicles (“MHDVs”), a 25% tariff on medium- and heavy-duty vehicle parts (“MHDVPs”), and a 10% tariff on buses pursuant to Section 232 of the Trade Expansion Act of 1962. Section 232 authorizes the president to adjust duties on goods imported in quantities or under circumstances that threaten U.S. national security following an affirmative finding from a Department of Commerce investigation.
Here, the Department of Commerce initiated an investigation in April (see Update of April 24, 2025) and concluded that “in addition to aiding critical ground mobility, combat support, and logistics operations throughout all branches of the military,” MHDVs, MHDVPs, and buses “support emergency response across medical, law enforcement, and disaster relief efforts…[and] are indispensable to the continuity of American critical infrastructure and economic stability.” The offshoring of their productions abroad since the 1990s has increased at such a rate that a national security concern now exists.
While Proclamation 10984 was not entirely unexpected—President Trump had announced in September that a 25% tariff on heavy-duty trucks would begin October 1, 2025 (see Update of September 26, 2025)—he did not issue a formal proclamation by that date. As a result, implementation of that tariff was effectively delayed until President Trump issued Proclamation 10984.
Proclamation 10984, however, includes several carve-outs. For example, the Section 232 tariff does not apply to MHDVs or buses that were manufactured more than 25 years ago. Additionally, MHDVs and MHDVPs not listed in Annex I to Proclamation 10984 are exempt from the tariff.
The full scope of the Section 232 tariff is also limited in certain instances. Specifically, MHDVs that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) are eligible for partial tariff relief: Importers of such vehicles may submit documentation to the Department of Commerce identifying the U.S.-origin content in those imported models so the tariff applies only to its non-U.S.-origin content. However, Proclamation 10984 warns that overstating the value of U.S.-origin content will trigger a punitive tariff equal to 25% of the full value of the imported MHDV, notwithstanding its eligibility for preferential tariff treatment under the USMCA.
By contrast, USMCA-qualifying MHDVPs are exempt from the Section 232 tariff altogether—but only until the Department of Commerce establishes a process for distinguishing U.S.- from non-U.S.-origin content within such parts. Once that process is in place, the tariff will apply to the non-U.S.-origin portion of affected MHDVPs.
To incentivize domestic production and onshoring, Proclamation 10984 also directs the Department of Commerce to establish an “import adjustment offset” program to provide tariff relief to U.S. manufacturers. Under this program, U.S. manufacturers of MHDVs and MHDV engines may apply for an annual tariff refund equal to 3.75% of the aggregate value of MHDVs that they subject to final assembly in the United States. The program, however, will only be available between November 1, 2025—when the Section 232 tariff on MHDVs begins—through October 31, 2030, and refunds will only be issued to offset tariff liability incurred under the Section 232 tariff on MHDVs.
Although Proclamation 10984 focuses on MHDVs, MHDVPs, and buses, it also provides comparable relief for U.S. manufacturers of automobiles and automobile engines that are subject to the separate 25% Section 232 tariff on automobiles and certain auto parts imposed earlier this year (see Update of March 27, 2025 (announcing that tariff via Proclamation 10908) and Update of April 30, 2025 (amending Proclamation 10908 via Proclamation 10925)). Like the MHDV program, this offset program will enable U.S. manufacturers of automobiles and automobile engines to apply for an annual refund equal to 3.75% of the aggregate Manufacturer’s Suggested Retail Price (“MSRP”) value of automobiles that they subject to final assembly in the United States. The automobile offset program will run from April 5, 2025 through April 30, 2030, and, like the MHDV program, refunds may only be obtained to offset tariff liability incurred under the Section 232 tariff on automobiles and certain auto parts.
The proclamation clarifies that the new Section 232 tariffs will apply in addition to any other applicable tariffs, such as those levied pursuant to the International Emergency Economic Powers Act (“IEEPA”). Consequently, to guide importers on how to apply these overlapping tariffs, Proclamation 10984 alludes to the stacking procedure described in Cargo Systems Messaging Service (“CSMS”) # 65236574 of June 3, 2025 (see Update of June 5, 2025).