Truck Prices to Rise as Early as May Due to Tariffs

This article describes how truck manufacturers are increasing prices of new Class 8 tractors due to tariffs on U.S. imports. Key points include:

• Volvo Trucks North America and Mack Trucks warned customers of price increases starting in May 2025 following the Trump administration’s 25% tariff on steel and aluminum imports.
• Even before the tariffs, the 2025 demand was weaker than expected, with ACT Research cutting Class 8 demand forecasts by about 8%.
• Major manufacturers reported sales declines, with Daimler Truck North America and International Motors both reporting 16% year-over-year drops in Q1 2025.
• The Trump administration initially announced broader tariffs, including matching 25% tariffs on Canadian and Mexican imports.
• The administration also announced minimum 10% tariffs on all imports outside the USMCA agreement, but these were paused for 90 days on April 9 after widespread criticism and market turbulence.
• According to FTR Transportation Intelligence, steel and aluminum tariffs alone are expected to increase Class 8 truck costs by 4-6% and Classes 4-7 costs by 4-5%.
• Class 8 orders have declined significantly, with March 2025 orders down 14% month-over-month and 22% year-over-year, with Q1 orders down 25% compared to 2024.
• Analysts cite economic indicators, stagnant freight market, and tariff uncertainty as reasons for the decline.

The broader implications of the steel and aluminum tariffs go well beyond just higher truck prices—they ripple through the entire economy and global trade landscape:

1. Increased Manufacturing Costs: U.S. manufacturers that rely on imported metals—like automakers, appliance makers, and construction firms—face higher input costs. This can lead to price hikes for consumers or squeezed profit margins.
2. Supply Chain Shifts: Some companies are rethinking their sourcing strategies. For example, firms like Emirates Global Aluminum and Hyundai Steel are investing in U.S. production facilities to avoid tariffs, which could boost domestic capacity but take time to scale.
3. Inflationary Pressure: As costs rise across multiple sectors, there’s a risk of broader inflation, especially if companies pass those costs down the line.
4. Trade Tensions: These tariffs have already triggered retaliatory measures from trading partners in the past. Renewed or expanded tariffs could strain diplomatic and economic relations, particularly with the EU and China.
5. Market Realignment: U.S. prices for steel and aluminum are now significantly higher than in other regions. This could make U.S. exports less competitive and shift global trade flows, with some foreign producers potentially exiting the U.S. market altogether.
6. Policy Precedent: The use of Section 232 for national security justifications sets a precedent for future administrations to impose tariffs more broadly, potentially reshaping U.S. trade policy for years to come.

Source: https://www.ttnews.com/articles/tariffs-raise-truck-prices