PACCAR presented seven proposals for the USMCA review, aimed at strengthening manufacturing in the United States. Among them are maintaining tariffs on finished trucks, simplifying parts certifications, and adjusting the calculation of Labor Value Content (LVC). PACCAR’s proposals seek to bring jobs back to the U.S. and consolidate strategic supply chains.
This company is the only high-volume U.S. manufacturer of medium- and heavy-duty trucks.
The USTR opened public consultations for the 2027 USMCA review, with a 103-day period running through January. According to the consulting firm Ansley, this announcement indicates that the 16-year renewal of the treaty will not be finalized in the short term. Stakeholders will be able to submit comments and participate in public hearings.
PACCAR’s Proposals
The company identified the following priorities during the joint review of the USMCA:
First. Maintain Section 232 tariffs applicable to finished medium- and heavy-duty trucks, chassis (with or without engines), knock-down kits, and other equivalent combinations of components.
Second. Maintain duty-free treatment for parts and components that comply with USMCA standards and are installed in trucks manufactured in the United States. In addition, a 70% Regional Value Content (RVC) threshold applies to such parts. This is intended to reflect the smaller market size, the wide variety of components needed to cover a broad range of applications, and the greater complexity of the truck supply chain compared to that of passenger vehicles.
Third. Allow USMCA certificates of compliance for parts and components to remain valid until their status changes or for a period of 2 or 3 years. This would apply instead of requiring annual recertification of each part and component. Why? Annual renewals place an unnecessary burden on manufacturers and the supplier base.
Import Facilitation
Fourth. Adjust the LVC formula to support manufacturing jobs in the United States by calculating the LVC based solely on assembly-related labor. No longer based on IT, R&D, engineering, or design costs.
Fifth. Maintain the 70% steel and aluminum content requirement. But simplify traceability requirements to fulfill the purpose of the USMCA without creating an unnecessary compliance burden for U.S. truck manufacturers.
Sixth. Create a tax credit for manufacturers that are net exporters from the United States. That is, for those who produce more finished vehicles in the country than they register for sale there. This would allow them to use the credit to import a limited number of duty-free trucks, provided they meet the CVR and CVL requirements for finished vehicles. The credit would also offset tariffs on parts and components intended for trucks manufactured in the United States that comply with USMCA standards.
Trucking in the United States
According to PACCAR, more than 72% of freight in the United States is transported by truck, and 80% of U.S. communities rely exclusively on trucks for the supply of essential goods and the provision of critical services.
Company Profile
PACCAR’s Peterbilt and Kenworth trucks account for more than 30% of the U.S. heavy-duty truck market. They transport more than 20% of the country’s freight daily.
Kenworth and Peterbilt also manufacture the trucks of choice for vocational applications, ranging from highway and pipeline construction, power generation, and mining operations to municipal services.
The company also supports more than 900 Kenworth and Peterbilt dealerships and service centers, as well as thousands of U.S. suppliers of parts and components.
PACCAR is a global company with sales and operations in more than 100 countries and a market capitalization greater than that of Ford and Volkswagen.
PACCAR has consistently manufactured more than 90% of its medium- and heavy-duty trucks in the United States, as well as 100% of its engines for the U.S. market.