Shares of Paccar experienced a significant rise on Friday following President Donald Trump’s declaration of a 25% tariff on imported heavy trucks, set to take effect on October 1. The announcement saw Paccar’s stock increasing by more than 6% in premarket trading.
In a statement made on social media, Trump noted that established truck manufacturing companies, including Peterbilt, Kenworth, Freightliner, and Mack Trucks, would be safeguarded from “the onslaught of outside interruptions.” This move is perceived as a strategic effort to bolster domestic manufacturers against foreign competition.
Paccar, the parent company of Peterbilt and Kenworth, produces over 90% of its trucks within the United States. However, the production costs for these domestically manufactured vehicles are estimated to be between $8,000 to $10,000 higher than those produced by competitors in Mexico, according to a report by Bank of America.
BofA analyst Michael Feniger indicated that Trump’s tariff announcement likely resolves this competitive pricing dilemma and positions Paccar favorably in the market. The implications of this tariff could have a long-lasting impact on the U.S. heavy truck manufacturing sector, potentially reshaping the competitive landscape as companies adapt to the new trading environment.
