Washington: US President Donald Trump on Friday signed an order extending tariff relief for automakers while formalising a 25% duty on imported medium and heavy-duty trucks and parts, effective from November 1.

According to the White House, the move continues an arrangement that lets car manufacturers reduce tariffs on imported vehicle components. At the same time, it introduces new tariffs aimed at strengthening domestic production in the truck sector.

The announcements came after the Trump administration launched a so-called Section 232 probe into imports of trucks this year to determine their effects on national security.

The president has used such investigations, under the authority of the Trade Expansion Act of 1962, to impose tariffs on various imported goods in efforts to boost domestic manufacturing and punish countries that he says are taking advantage of the United States.

Among sectors impacted so far have been steel and aluminum, as well as autos.

But the latest announcement also extends Trump's effort in April to soften tariffs on US automakers.

Companies that import parts for vehicles assembled in the United States are able to offset 3.75 percent of a vehicle's list price, but this offset was due to be reduced after a year and eventually be eliminated.

Friday's order extends the 3.75-percent offset program to 2030, without a reduction in the percentage.

A similar program of offsets is being set up for medium and heavy duty trucks, extending through 2030.

Officials said the overall set-up was meant to reward US-based vehicle production.

While imported trucks will soon face a steep duty, senior US officials told journalists that there will still be some favorable treatment linked to the US-Mexico-Canada trade agreement (USMCA).

Capital Economics earlier estimated that the United States sources 78 percent of heavy truck imports from Mexico and 15 percent from Canada.

Under the incoming regime, trucks qualifying for favorable USMCA treatment will only see their non-US content hit with the 25-percent tariff.

Eligible truck parts will enter tariff-free until the Commerce Department establishes a process to target their non-US content.

Imported buses, which will face a 10-percent tariff, will not be granted favorable treatment under the USMCA, the senior Trump administration officials said.

Canada and Mexico have been seeking deals with Washington after Trump targeted the United States' immediate neighbors with sharp levies this year.

Trade pressure has been taking a toll on Mexico, with the country's exports of heavy vehicles to the United States falling by nearly 26 percent year-on-year in the January to August period.

AFP