On March 26, President Trump issued a Presidential Proclamation imposing a 25% additional tariff on imported cars, light trucks, and certain vehicle parts. These tariffs are based on the results of a 2019 Section 232 investigation and newly provided information from the Commerce Secretary, among other things.
ST&R offers a three-pronged approach for avoiding, mitigating, and/or recovering these and other tariffs. For more information on which of these strategies might be most effective for your business, please contact ST&R.
Products Subject to Tariffs
The tariff will apply to passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans), light trucks, and certain automobile parts (engines and engine parts, transmissions and powertrain parts, and electrical components). Affected products are specified in Annex 1 of this Federal Register notice.
In the future, additional automobile parts may be added through a process to be established by the Secretary of Commerce. Requests to include additional automobile parts in the tariff can be made by a domestic producer or industry association representing at least one domestic producer.
Effective Dates
- The tariff on automobiles are in effect as of 12:01 am Eastern Daylight Time on April 3, 2025.
- The tariff on automobile parts will be in effect as of 12:01 am Eastern Daylight Time on May 3, 2025. .
USMCA-Originating Automobile & Automobile Parts
Automobiles: For automobiles that qualify for preferential tariff treatment under USMCA, importers may submit documentation identifying the amount of U.S. content in each model imported, and the 25% tariffs will then apply exclusively to the value of the non-U.S. content of the automobile. U.S. content is identified as "parts wholly obtained, produced entirely, or substantially transformed in the United States."
If CBP determines that the declared value of non-U.S. content of an automobile overstates U.S. content, the 25% tariff will apply to the full value of the automobile. In addition, the 25% tariff shall be applied retroactively from April 3, 2025 to the full value of all automobiles of the same model imported by the same importer.
Automobile Parts: For automobile parts that qualify for preferential treatment under the USMCA, the 25% tariffs will not apply until the Secretary of Commerce establishes a process to apply the tariff exclusively to the value of the non-U.S. content and publishes same in a Federal Register notice.
Additional Details
- Drawback is not available
- Any automobile or automobile part, except those that are eligible for admission under domestic status, that are subject to these tariffs and are admitted into a U.S. foreign-trade zone on or after the effective date must be admitted as privileged foreign status. Upon entry for consumption such articles will be subject to the duty rates related to the applicable HTSUS subheading in effect at the time of admittance into the FTZ.
Official Documents