Navigating the Changing Trade Landscape: How Tariffs Impact Our Industry

Disclaimer: This information was compiled as of March 13, 2025. Given the dynamic nature of the current trade landscape, please verify that you are consulting the most current and relevant information.

Navigating the Changing Trade Landscape: How Tariffs Impact the Light- and Medium-Duty Trailer Industry

Ever-evolving trade policies and tariff regulations are creating significant challenges and uncertainties for the trailer industry. With the recent shifts in tariff structures under the current Administration, trailer manufacturers, suppliers, and dealers must stay informed and agile to navigate these complexities effectively. During NATM’s recent webinar on March 13, 2025, policy professionals Brian Hopkins and Brody Garland from K&L Gates provided key insights into the latest tariff policies, their implications, and strategies for mitigating financial risks.

Key Tariff Actions Affecting the Industry

Brian Hopkins began the discussion with a high-level overview of major trade actions that are reshaping the landscape:

1. Universal Tariffs on Imports from China – Originally set at 10%, these tariffs have now doubled to 20% and apply across all imported Chinese goods.
2. Tariffs on Imports from Mexico – A 25% tariff has been imposed on all goods imported from Mexico. These tariffs have been partially paused for USMCA-compliant goods. Scheduled to go into effect on April 4, 2025, pending ongoing negotiations.
3. Tariffs on Imports from Canada – Similarly, a 25% tariff applies to all Canadian imports, except for energy products such as electricity, natural gas, and oil, which are subject to a 10% tariff. Similarly, these tariffs have been partially paused for USMCA-compliant goods. Scheduled to go into effect on April 4, 2025, pending ongoing negotiations.
4. Steel and Aluminum Tariffs – A 25% tariff on imported steel and aluminum remains in place, affecting essential materials in trailer manufacturing, including derivative items such as bolts, staples, nails, and other similar items.
5. Retaliatory Tariffs on U.S. Manufactured Goods – A response from other nations, including Canada and China, could see retaliatory tariffs applied to U.S. exports, complicating international trade relationships.
6. Reciprocal Tariff Program – A proposal to increase tariffs on goods based on the rate that a foreign country imposes on imports of similar U.S.-origin goods, currently scheduled to go into effect on April 2, 2025.

Understanding the Policy Intentions Behind Tariffs

Tariffs are often more than just economic measures—they can serve as negotiation tools in broader trade discussions. The Administration’s key policy objectives driving these tariffs include:

• Addressing trade imbalances and reducing dependence on Chinese manufacturing
• Encouraging domestic manufacturing and reshoring production
• Using tariffs strategically in negotiations to leverage better trade deals

Unlike the previous Administration’s Section 301 tariffs, which allowed for exclusions, the current Administration has limited these options, signaling a long-term commitment to their tariff policies.  Hopkins quoted Treasury Secretary Scott Bessent stating, “Access to cheap goods is not the essence of the American Dream. The American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security…International economic relations that do not work for the American people must be re-examined.” This statement underscores the Administration’s belief that tariffs are a necessary step to achieving broader economic goals.

How Trailer Industry Businesses Can Prepare

With exclusions off the table and tariffs expected to remain in place, trailer manufacturers should take proactive steps to manage their supply chains and financial risks:

1. Assess Supply Chain Exposure – Businesses should consider analyzing what percentage of their materials are imported and identify potential vulnerabilities. Knowing where components originate is critical in determining exposure to tariffs.
2. Understand Retaliatory Tariffs – Exporters can review the HTS codes of their products to determine if they are subject to retaliatory tariffs in key markets.
3. Review and Adjust Contracts – Businesses can evaluate that their contracts clearly define how tariff-related cost increases will be managed. Revisiting pricing agreements and negotiating terms can also help mitigate unexpected expenses.
4. Monitor Policy Changes and Seek Expert Advice – With trade policies shifting rapidly, having a trusted advisor with both industry and policy expertise can provide crucial insights. A dedicated trade specialist or legal counsel can help businesses navigate specific tariff implications.

Industry Concerns and Legislative Engagement

During the Q&A session, attendees raised concerns about how these policies would impact businesses operating in multiple countries. Key takeaways included:

• Manufacturing in Mexico: Even if a company is U.S.-owned, products manufactured in Mexico can still be subject to the 25% tariff under country-of-origin rules.
• Products with Mixed Origins: Items assembled in Canada using Chinese components may still be classified as Chinese imports unless they undergo substantial transformation in Canada.
• Cumulative Tariffs: If a product, such as a steel coupler from China, is subject to both steel tariffs and additional import tariffs, they can be additive, potentially doubling the tariff burden.

To influence trade policy, businesses must engage with legislators and communicate how tariffs impact their operations and workforce. As Brody Garland emphasized, advocacy at the local and national levels can help shape future trade decisions, by stating:

"For larger-scale policy issues, hearing from a trade organization [NATM] that is focused on safety may not be the most effective avenue. However, as a manufacturer or business, directly reaching out to your legislators and explaining how these policies impact your district—whether it's affecting jobs or consumers—can make a real difference. Highlighting the number of workers or customers impacted helps lawmakers understand the local consequences. At K&L, we can be most useful at the ground level, helping member companies navigate and communicate these challenges effectively."

NATM Executive Director Alex Stowe said, “NATM represents a diverse range of members, each with unique products, supply chains, and trade challenges. The best course of action is to work with a specialist who understands trade regulations and can provide guidance tailored to your specific business needs.”

Final Thoughts

The current trade environment presents both challenges and opportunities for trailer manufacturers. While tariffs can drive up costs and complicate supply chain decisions, companies that proactively manage risk and stay informed will be better positioned to adapt. By leveraging industry resources, seeking expert guidance, and advocating for policies that support the sector, trailer businesses can navigate this evolving landscape successfully.

For more updates on trade policies affecting the trailer industry, stay connected with NATM and join us for future discussions.

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