The T-Word: Tariffs & The Heavy-Duty Industry

Buckle up, gang. We’re about to get into the T-word.

No, not Tyrannosaurus rex or tapioca. Not taxidermy, either. 

We’re dealing with the other T-word. The one you’ve probably seen batted around a lot.

Tariffs.

Yeah. Brace yourselves — we’re going there. 

Tariffs have attracted a lot of attention from the heavy-duty industry for two big reasons: 

1. Anything that impacts trade impacts freight, which in turn can impact shops; 
2. A lot of heavy-duty components are manufactured overseas.

Since Fullbay is heavy-duty repair shop software, we were particularly interested in what might happen with Reason #2. We remember quite well the troubles that hit parts sourcing during the pandemic, when so many overseas manufacturers had to curtail production during outbreaks. Obviously, tariffs are not the same thing as an illness, but we did wonder how they might hit the parts market (along with the market for taxidermied tyrannosaurs). 

Before jumping in, we want to advise that we are not economists. We also are not clairvoyant. We also are very aware that the tariff situation is…oh, let’s call it “fluid” for now, with changes and adjustments happening seemingly every other day (and what we tell you here might be out of date real fast). 

To learn more about the situation, we had a virtual sit-down with Jamie Irvine of The Heavy Duty Parts Report. There’s no better person to talk to when it comes to heavy-duty parts, and he’s been watching the tariff situation for a while. What follows is a very high-level look at the current impact of tariffs on the heavy-duty industry, along with some general advice for how shops can weather the situation. 

ARRR, WHAT BE TARIFFS, MATEY?

We’ll preface this section with the wisdom of Bob Costello, Chief Economist and Senior Vice President of the American Trucking Associations (ATA), which he delivered during his economic update at Diesel Connect 2025: “Tariff policy is complicated, and it’s confusing.” 

A tariff is a tax (also called a duty) on an imported good. 

The tariff is paid by whoever is selling the item. At least, that’s where it starts; the increase could also be passed on to the consumer in part or in whole. Reasons for tariffs vary historically; Investopedia talks about governments using tariffs to increase market share or spark manufacturing at home as potential reasons to impose tariffs, among others. You can see the rationale: If it’s ultra-expensive to bring stuff in, we should just make it here, right?

(Hold that thought — we’ll address it soon.) 

If you want to see heavy-duty tariffs in action (or are looking for something to help you fall asleep), check out the “Vehicles, Parts and Accessories” publication on the Customs & Border Patrol website. It is a rundown of how vehicle-specific components are classified so “importers, exporters, customs brokers and Customs officers will know how to classify them correctly.” 

That publication, by the way, is nothing compared to the Harmonized Tariff Schedule of the United States as it pertains to the heavy-duty industry. Head for Chapter 87, “Vehicles other than railway or tramway rolling stock, and parts and accessories thereof,” if you really want to get into the nitty-gritty. In its present form, it’s 35 pages, so…enjoy. 

THE TROUBLE WITH HEAVY-DUTY PARTS

Generally speaking, U.S. consumers are not opposed to buying components manufactured in the U.S. Many of them even prefer it! Jamie’s interviews have borne this out; he spoke to Switchblade Turbos on his podcast earlier this year, which remanufactures turbochargers. They’re a U.S.-based company, and while some of their costs went up on components sourced globally, they’ve gotten a lot more business. “They’re providing the U.S. consumer with a U.S. option,” Jamie explained. “They benefited from the tariffs.” 

Cool, right? We’ll all just buy American-made stuff and call it a day.

Alas, in a lot of cases, there isn’t necessarily a like-for-like U.S.-manufactured option. So dealership groups, distributors, and repair shops may end up passing the costs along to fleets and consumers, because, well, everything and the kitchen sink travels on a truck at some point. 

The current industry reaction to tariffs, then, is something of a mixed bag. Some folks are benefiting and seeing an increase in business, but there’s a lot of added complexity and administrative costs. And ultimately, these higher prices can be pushed on to consumers. 

WHAT IS DIFFERENT ABOUT THESE TARIFFS?

Regardless of the intent behind tariffs or what they might eventually lead to, there is — at the moment — some industry frustration directed towards them. This is largely because the tariffs themselves are starting to feel like the hokey-pokey: 

You put this tariff in place

You pause that tariff two days later

You put another tariff in place

And then you exemption it all about

What this translates to, in less charming terms, is that tariffs get announced and then may quickly be changed or updated: on February 1, 2025, for example, a 25% tariff was “imposed on most imports from Canada and a 10% tariff on Canadian energy products.” On February 3, just two days later, the tariff was paused for a month. 

That example is one of many; for a more extensive list, head over to Congress.gov for a tariff timeline. 

The unpredictability of this set of tariffs is the equivalent of shifting sands underneath a construction site. Companies are pausing large projects because, quite frankly, they don’t know what their costs will be tomorrow, much less next week or next month. That makes settling in for any kind of long haul difficult, and no one is quite sure what the ultimate impact on the economy will be. 

On top of all this, the legality of the tariffs have been repeatedly questioned. Generally speaking, Congress is the entity in charge of setting tariffs. Over the years, some of that authority has been passed on to the president through various acts. The current administration is largely invoking the International Emergency Economic Powers Act (IEEPA) to enact a good chunk of the current tariffs, citing drugs and unfair trade practices as the emergencies. Whether the administration had the power to do that remains in question and has provoked lawsuits and even the scrutiny of the Supreme Court. 

WHAT IS THE IMPACT OF TARIFFS ON THE HEAVY-DUTY INDUSTRY SO FAR?

The initial impact on the industry, Jamie told us, came through increased administrative load as pretty much everyone attempted to figure out how to apply tariffs correctly. “Suppliers are having a hard time keeping up because it’s changing so quickly,” he said. “It funnels down to the distributors who resell the parts to the repair shops.”

From there, he added, distributors have some choices to make: 

• Do they just ingest the increased cost and increase the price per unit? If a component is $10 today, for example, it might be $12.50 tomorrow. 
• Should they break it out as a surcharge? 

If the tariffs end up going away, the distributors’ price points may return to normal. “They don’t want to be seen as gouging their customers,” Jamie added. “I think most companies are just passing it along to the end user.” 

(Psst! Jamie covered this topic more in-depth with Bill Frymoyer, Vice President of Public Policy at MEMA, on a recent episode of The Heavy Duty Parts Report. Go listen!)

Something further to noodle on: Jamie has talked with heavy-duty folks across the country, and all reported the same thing: October was great, work-wise, but dropped off sharply in November. “It may be that some of the things put in place several months ago are just now starting to impact us,” he said. “In that case, we might see further downturn in the future.”

LET’S TALK ABOUT THE USMCA

Bringing heavy-duty parts manufacturing back to the U.S. could solve a lot of problems, but there’s one teeny, tiny caveat: one does not simply open a factory and call it done. Realistically, such an effort would take years to plan for and execute. 

In the meantime, Jamie points toward the United States-Mexico-Canada Agreement, or USMCA, as a place to start. The USMCA is a free trade agreement between these three countries; recent tariff announcements targeting the heavy-duty industry were somewhat offset by the USMCA’s existing regulations. Instead, these tariffs specifically applied to “non-U.S. content in qualifying vehicles.” 

That brings us back to the original problem: a lot of parts come from a galaxy far, far away. 

(Editor’s Note: Or, you know, other countries.) 

So if a vehicle is assembled in Mexico, and it has components in it that were made in, say, China, then…pow! Those parts are tariffed. That will generally lead to a more expensive vehicle overall.

At his Diesel Connect presentation, Bob Costello told us how fleets might respond to more expensive vehicles: “[They’ll] start extending their trade cycles,” he said. That could end up being a positive for repair shops, though he cautioned it’s something to keep an eye on. 

Jamie would like to see the USMCA revisited and strengthened. “You don’t need to make everything on U.S. soil to make it work and make it beneficial for the United States,” he added. “But you do need a strong North American sector.” 

Mexico has the workforce and low-cost manufacturing required to be competitive; Canada has natural resources and energy. Both, he said, need to get their own political situations in order, too. Still, that alliance, if properly nurtured, can lead to more manufacturing overall within North America, along with better trade relationships. 

WHAT CAN REPAIR SHOP OWNERS AND FLEETS DO RIGHT NOW?

In the words of Hitchhiker’s Guide to the Galaxy, don’t panic.

Or at least try not to panic.

Shop owners and fleet managers are understandably a little anxious. Realistically, no one is entirely sure what is going to happen. Some folks may be looking at their parts room and wondering if they should do a little parts hoarding. We understand the temptation, but it may not be a great idea; in a prior conversation, Jamie relayed traveling around the country in late summer of 2024 and meeting with distributors who still had heaps and heaps of parts they’d panic-bought during COVID. They could not offload that stuff because prices and supply had normalized.

It’s the same story with the tariffs: “You could end up with parts at above market pricing if a projected tariff is suddenly retracted or a deal is made with a country.” 

If you’re a repair shop nervously eyeing the tariff situation, now is the time to be proactive. Make sure you’re calculating your true costs. Then, price fairly and keep communication lines open with customers. Seriously, talk to them. Let them know what’s up. 

That’s really about all anyone can do.

WHAT’S NEXT IN TARIFF-LANDIA?

Unfortunately, our DeLorean is in the shop so we can’t tell you what’s going to happen in the next few months and years. The only way to see how things shake out is to watch. But we’ve also had a long freight recession that we haven’t fully recovered from. In addition, while some areas of the industry are doing pretty well, a lot of folks are reporting a slowdown in work.

“The trucking industry is always kind of the canary in the coal mine,” Jamie said. “If the trucking industry slows, the general economy follows.” 

On the flip side, the trucking industry usually recovers first, too, because once things do bottom out, there’s nowhere left to go but up. People will need to eat, and get clothes for their kids, and get new tires for their cars. All that stuff arrives on a truck, and the trucks will keep rolling. Things will start to grow again, trucking will boom, and the general economy will follow suit. 

For now, sit tight. End-of-year data is going to tell us a lot, even if we have a pretty good idea of where things are headed. “If people spend less [during the holidays] and the freight volume is down, that’s a good indication of where we’re actually at,” Jamie said. “I think the Q4 results are going to tell us a lot about the economic standing of [the U.S. and Canada].”

And hey, if you want to hear more from Jamie, go listen to The Heavy Duty Parts Report! Every episode is well worth your time.