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Truck Prices Expected to Rise Starting May Due to Tariffs

by Mich M.
04/10/2025
in Tariffs & Duties

Truck manufacturers are preparing to raise the prices of new Class 8 tractors beginning in May, in response to recent U.S. tariffs on imported steel and aluminum. Additional price increases are anticipated as manufacturers adjust to higher raw material costs.

Volvo Trucks North America and Mack Trucks informed customers in March of upcoming vehicle price hikes linked to the 25% tariff on steel and aluminum imports. These manufacturers are expected to pass increased production costs on to buyers. The specific scale of the price increases has not been disclosed.

Volvo Trucks North America produces trucks at its New River Valley plant in Dublin, Virginia, while engines, transmissions, and axles are made in Hagerstown, Maryland. Mack Trucks also utilizes the Hagerstown facility for powertrains, assembles long-haul cabs in Macungie, Pennsylvania, and builds medium-duty trucks in Salem, Virginia.

In addition to the raw material tariffs, demand in 2025 for Class 8 trucks has been lower than projected. ACT Research revised its annual forecast in February, reducing expected demand by approximately 8% to 288,800 units.

Other manufacturers have reported similar trends. Daimler Truck North America noted a 16% year-over-year decline in first-quarter sales, with International Motors reporting a comparable decrease.

Daimler Truck, Kenworth, and Peterbilt have not confirmed whether tariffs will influence their vehicle pricing. Paccar, the parent company of Kenworth and Peterbilt, is still reviewing the implications of the trade measures.

The tariff increase was announced by the Trump administration in February, with a 25% rate taking effect March 12. Previous 10% tariffs implemented during Trump’s first term were also revoked, removing exemptions for several allied nations. Reciprocal tariffs targeting Canadian and Mexican imports were introduced on March 4 but partially rescinded two days later for products complying with the United States-Mexico-Canada Agreement (USMCA).

The administration also proposed a minimum 10% tariff on all imports from outside the USMCA, with higher rates anticipated for goods from some countries, particularly China. Industry associations have raised concerns about potential impacts on freight volumes and equipment costs.

On April 9, the administration announced a 90-day pause on the reciprocal tariffs. However, market volatility and uncertainty regarding the final scope and application of the tariffs continue to affect business confidence and forecasts.

Analysts estimate that the steel and aluminum tariffs alone may result in a 4% to 6% increase in Class 8 truck prices. Trucks in Classes 4 through 7 could experience price hikes of 4% to 5%.

Data from FTR Transportation Intelligence indicates that March Class 8 truck orders declined to approximately 15,700 units, a 14% decrease from the previous month and a 22% drop year-over-year. First-quarter orders for 2025 fell by 25% compared to the same period in 2024. Contributing factors include economic uncertainty, flat freight demand, and ongoing regulatory and tariff-related concerns.

While the decline in truck orders is notable, analysts suggest the broader economic outlook may face more significant impacts. Some draw comparisons between current market conditions and those observed during previous economic downturns.

Ongoing developments in trade policy and economic indicators will continue to shape industry sentiment and purchasing behavior throughout the remainder of the year.

Stay updated with supply chain logistics news on The Supply Chain Report. Free international trade tools are available at ADAMftd.com.

#TariffsAndDuties #SteelTariffs #TruckManufacturing #GlobalTradePolicy #SupplyChainImpact #FreightIndustry #CommercialVehicles #TradeRegulations #RawMaterialCosts #EconomicOutlook2025

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