A new set of tariffs on heavy trucks and buses has been implemented, causing concern among industry participants regarding the impact on Canadian manufacturers. Effective immediately, all foreign imports of medium and heavy-duty trucks and truck parts bound for the U.S. will face a 25% tariff, while buses will be subject to a 10% tariff. However, trucks traded under the Canada-U.S.-Mexico Agreement will only be tariffed for their non-American parts.
The rationale behind these tariffs, as stated by U.S. President Donald Trump and his administration, is to address national security risks associated with relying on imported trucks, parts, and buses. This development is expected to pose challenges for companies like Edison Motors in Golden, B.C., which trade vehicles and parts between Canada and the U.S. The president of Edison Motors, Chace Barber, expressed disappointment over the new tariffs, highlighting the difficulties in selling to the U.S. market and the potential cost implications for their heavy-duty semi trucks.
The heavy truck and bus production sector in Canada, although relatively small compared to other industries, plays a significant role in the economy. According to Canadian government data, in 2024, Canada exported approximately $5 billion worth of trucks to the U.S. while importing nearly $9 billion worth. The impact of these tariffs is felt across the industry, affecting approximately 20,000 workers nationwide.
Companies such as Paccar, a Quebec-based truck manufacturer, have already announced layoffs in response to the tariffs. The uncertainty created by these measures has led to job cuts and heightened stress among workers and their families. The potential ramifications of these tariffs extend to other manufacturers in the sector, such as bus maker Prevost and New Flyer, who are evaluating the tariff implications on their production.
In addition to the direct impact on truck and bus manufacturers, the tariffs on steel and aluminum, essential materials for vehicle production, will further exacerbate the challenges faced by the industry. Saibal Ray, a supply chain management professor at McGill University, warns that smaller manufacturing sectors like truck production may suffer disproportionately from these tariffs, potentially leading to factory closures and job losses.
To mitigate the effects of these tariffs and support domestic manufacturing, there is a growing call for a “Buy Canadian” initiative. This shift towards promoting Canadian-made products could help sustain the truck and bus manufacturing industry in the country. Despite the challenges posed by the tariffs, there is optimism among industry players like Chace Barber, who believes there is a viable market in Canada for the trucks his company produces, prompting a reevaluation of business strategies to focus on the domestic market.
