December 2025
Executive Summary
In late 2025, a record 43-day partial U.S. government shutdown ended with temporary funding through January 30, 2026, setting up continued budget negotiations. Despite disruptions, key transportation functions remained operational, and new leadership was confirmed at FMCSA.
Significant policy changes included new 25% tariffs on imported heavy trucks, stricter driver safety enforcement, and proposed rollbacks of emissions regulations. Congress is advancing legislation on CDL standards, workforce issues, and infrastructure funding, while also addressing cargo theft and supply chain security.
Looking ahead, early 2026 will focus on finalizing federal appropriations, advancing transportation regulations, and reviewing the USMCA trade agreement, with continued attention to safety, workforce, and freight efficiency.
Shutdown Ends, But Funding Uncertainty Remains
The second half of 2025 was marked by extended legislative negotiations, culminating in a record-setting 43-day partial government shutdown that ended in mid-November. The current spending measure funds most federal agencies through January 30, 2026, setting up another round of discussions over the full Fiscal Year (FY) 2026 budget package early next year.
The shutdown, which began on October 1, marked the first funding lapse since 2019. The impasse centered on differing positions regarding the extension of enhanced Affordable Care Act subsidies and the timing of when those negotiations should occur.
Resolution: In November, the Senate secured the 60 votes required to advance a funding measure, which subsequently passed the House and was signed into law by President Trump. The legislation provides full-year appropriations for Agriculture, Veterans Affairs, and the Legislative Branch, while extending current funding levels for most other agencies to January 30.
United States Department of Transportation (USDOT) Operations: Most highway and trucking programs continued during the shutdown, supported by funding from the Highway Trust Fund and the Infrastructure Investment and Jobs Act. All 1,084 Federal Motor Carrier Safety Administration (FMCSA) employees remained on duty, maintaining oversight of motor carrier safety, licensing, and the Drug and Alcohol Clearinghouse.
New Administration at FMCSA
The Senate confirmed several transportation officials in September and October, including Derek Barrs, as the Administrator of the FMCSA.
Barrs, a former Florida Highway Patrol chief, has more than three decades of public safety experience. His background includes service at the Florida Department of Transportation and consulting work on traffic and commercial vehicle safety initiatives across multiple states.
New Tariffs and Trade Policy Affect Heavy Truck Sector
In November, the Administration implemented a new tariff structure that affects the cost and production of commercial vehicles.
Effective November 1, medium- and heavy-duty trucks imported into the United States became subject to a 25% tariff. This applies to a broad range of vehicles, including delivery trucks, garbage trucks, transit buses, and tractor-trailer trucks.
United States-Mexico-Canada (USMCA) Exemptions: Heavy-duty trucks and parts that are United States-Mexico-Canada (USMCA)-compliant are exempt. For qualifying vehicles, tariffs apply only to the non-United States content value.
Domestic Incentive: The Administration introduced a manufacturing incentive providing a tariff offset equal to 3.75% of the aggregate value of all U.S.-assembled trucks from 2025 through 2030.
Pricing Impact: Analysts estimate the tariffs could raise the price of a new Class 8 tractor to about $212,000, and to approximately $238,000 when combined with the 12% federal excise tax (FET).
International Response: Mexico’s Economy Ministry stated that the 25% measure conflicts with USMCA provisions and indicated plans to seek adjustments reflecting the level of U.S. content in Mexico-built vehicles.
The United States, Mexico, and Canada have begun the formal review process for the USMCA trade agreement, scheduled to conclude on July 1, 2026. The U.S. Trade Representative (USTR) has requested public feedback on the agreement’s implementation and strategies to enhance North American economic competitiveness.
USDOT Expands Driver Safety Enforcement
The USDOT has increased safety enforcement activity related to non-domiciled commercial driver licenses (CDLs) and English language proficiency (ELP).
ELP Enforcement: Transportation Secretary Sean Duffy reported that USDOT has placed more than 7,000 drivers out-of-service for non-compliance with ELP standards and withheld more than $40 million in federal highway-safety funding from California for not fully adopting ELP roadside-inspection requirements.
Non-Domiciled Rule: FMCSA issued an interim rule restricting states from issuing non-domiciled CDLs to foreign drivers. In November, the U.S. Court of Appeals temporarily stayed the rule, allowing states to resume issuance pending further review. Many states have nonetheless paused new issuances. California officials announced plans to revoke approximately 17,000 CDLs after an audit found license expiration dates beyond the holders’ legal work-authorization periods.
CDL-Training Oversight: USDOT announced plans to review CDL-training providers to ensure compliance with Entry-Level Driver Training (ELDT) standards following an FMCSA audit that identified irregularities in some state licensing systems.
FMCSA also announced a study of 2,000 fatal truck crashes beginning in 2026, with preliminary results expected in 2029.
Regulatory Updates
The Administration advanced several regulatory revisions affecting vehicle-safety and environmental standards:
- Speed-Limiter Proposal Withdrawn: FMCSA and the National Highway Traffic Safety Administration (NHTSA) formally withdrew a 2016 proposal that would have required heavy trucks to use speed-limiting devices;
- Emissions Standards: The Environmental Protection Agency (EPA) proposed repealing the Greenhouse Gas Phase 3 (GHG3) rule and the associated Endangerment Finding, which serves as the legal foundation for greenhouse-gas regulation under the Clean Air Act. The proposal would remove existing GHG standards for heavy-duty vehicles, including a 2024 rule targeting 25% zero-emission truck sales by 2032; and
- California EV Mandate Repealed: Congress voted to rescind California’s Advanced Clean Trucks and Low NOx Omnibus regulations under the Congressional Review Act, reversing waivers that had permitted the state to apply stricter emissions requirements than federal standards.
Congress Focuses on CDL Standards, Workforce, Highway Funding, and Cargo Theft
Following enhanced federal enforcement of CDL requirements, lawmakers introduced several bills addressing driver licensing, workforce policy, and transportation infrastructure.
CDL-related legislation:
- SAFE Drivers Act (H.R. 5800): Establishes a uniform federal English-proficiency assessment for CDL applicants and authorizes USDOT to withhold funding from non-compliant states;
- Non-Domiciled CDL Integrity Act (H.R. 5688): Strengthens verification procedures for foreign CDL applicants; and
- Safer Truckers Act (S. 2690): Limits CDLs to U.S. citizens, permanent residents, or valid visa holders.
Workforce proposals:
- Guaranteeing Overtime for Truckers Act: Would extend overtime pay to drivers working more than 40 hours per week. Industry groups have expressed concern about potential cost and operational impacts;
- DRIVE Safe Act (H.R. 5563): Creates a structured training pathway for 18- to 20-year-olds seeking interstate driving experience;
- Registered Apprenticeship Expansion: Senate Health, Education, Labor, and Pension (HELP) Committee members expressed bipartisan interest in expanding apprenticeship programs to address labor shortages; and
- Independent-contractor bills: House proposals would clarify classification standards, joint-employer rules, and benefit provisions.
Highway-Reauthorization Discussions: Congressional committees have begun preparing for the next surface-transportation reauthorization, expiring in 2026. Key themes include:
- Highway Trust Fund Solvency: The fund could face shortfalls by 2028 without additional revenue. Options under discussion include EV fees, fuel-tax adjustments, or alternative models;
- Congestion: Annual productivity losses from bottlenecks are estimated at more than $100 billion;
- Autonomous-vehicle framework: The America DRIVES Act proposes national standards for Level 4-5 automated trucks; and
- Truck-parking shortages: There is currently about one parking space for every 11 drivers nationwide.
State Initiatives:
- Ohio announced a $150 million program to add 1,400 new long-term truck-parking spaces at 33 sites; and
- Pennsylvania plans to add 1,200 spaces on state-owned land and interstate on-ramps.
Cargo-Theft Legislation: Bipartisan bills in both chambers—collectively known as the Combating Organized Retail Crime Act (CORCA)—seek to improve coordination among law-enforcement agencies and enhance protection of supply-chain infrastructure. Industry studies estimate theft losses at up to $6.6 billion annually.
Looking Ahead to 2026
With funding extended and Congress reconvened, the first months of 2026 will focus on:
- Completing full-year FY 2026 appropriations, including the Transportation and HUD budget;
- Anticipated FMCSA regulatory actions, with as many as 41 rules under development by May 2026; and
- Preparation for the USMCA Joint Review, scheduled for mid-2026.
NMFTA will continue to monitor policy developments related to safety, freight efficiency, and workforce issues.
