Tariffs on Automobiles and Parts Starting Soon

Updated 04/02/2025

On March 26, 2025, U.S. President Trump issued a proclamation on Adjusting Imports of Automobiles and Automobile Parts into the United States. The tariff action, with the clear goal of safeguarding the United States’ national security under Section 232 of the Trade Expansion Act of 1962, implements a 25 percent tariff on foreign-made automobiles and automobile parts. The Federal Register notice of this proclamation contains Annex I, which provides the specific Harmonized Tariff Schedule of the U.S. (HTSUS) numbers subject to the new additional tariffs.

Initially, the additional tariff will apply to products from all origin countries, except auto parts that claim U.S.-Mexico-Canada Agreement (USMCA) preferential tariff treatment. However, in the future, once a process is established, certain USMCA automobiles will be able to apply the tariff exclusively to the value of non-U.S. content, and USMCA parts will transition to paying the tariff on non-U.S. content only.

Effective Dates

Automobiles

On April 3, 2025, all imports of articles specified in Annex I to this proclamation shall be subject to a 25 percent tariff when entered for consumption or withdrawn from warehouse for consumption by applying HTS 9903.94.01.

Automobile Parts

On May 3, 2025, all imports of automobile parts specified in Annex I to this proclamation shall be subject to a 25 percent tariff when entered for consumption or withdrawn from warehouse for consumption by applying HTS 9903.94.05.

Commodities Covered

Automobile Related HTSUS

8703.22.01
8703.23.01
8703.24.01
8703.31.01
8703.32.01
8703.33.01
8703.40.00
8703.50.00
8703.60.00
8703.70.00
8703.80.00
8703.90.01
8704.21.01
8704.31.01
8704.41.00
8704.51.00
8704.60.00

Auto Parts HTSUS

Exclusions

Automobiles

9903.94.02: Vehicles that are not passenger vehicles and light trucks and for U.S. content of cars and trucks exempt from tariffs upon approval by the Commerce Secretary.  25% tariffs apply to the non-U.S content of such vehicles under heading 9903.94.03

9903.94.04: Exempts passenger vehicles and light trucks manufactured 25 years or more before the date of entry.

Auto Parts

9903.94.06: Exempts goods that fall under the HTS subheadings that are not auto parts.  Goods that qualify for special tariff treatment under USMCA are also exempt under this code.  USMCA auto parts are exempt from these tariffs until the Commerce Secretary and U.S. Customs establish a procedure to exempt U.S. content.  A Federal Register notice will be published at a later date.

Additional Information

• The ad valorem tariff is in addition to any other duties, fees, exactions, and charges applicable to such imported automobiles and certain automobile parts articles.

• Within 90 days of the date of the date of this proclamation, a new process for including additional automobile parts will be established by the Secretary.  

USMCA

USMCA Automobiles

For autos that qualify for preferential tariff treatment under USMCA, importers of such automobiles may submit to documentation to the Secretary identifying the amount of U.S. content in each model imported into the U.S. Thereafter, the Secretary may approve imports of such automobiles to be eligible to apply the ad valorem tariff of 25 percent in clause (1) of this proclamation exclusively to the value of the non-U.S. content of the automobile.  The non-U.S. content of the automobile shall be calculated by subtracting the value of the U.S. content in an automobile from the total value of the automobile.

• U.S. content refers to the value of the automobile attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States.
• If U.S. Customs and Border Protection (CBP) determines that the declared value of non-U.S. content of an automobile, as described in clause (2) of this proclamation, is inaccurate due to an overstatement of U.S. content, the 25 percent tariff shall apply to the full value of the automobile, regardless of the actual U.S. content of the automobile.  In addition, the 25 percent tariff shall be applied retroactively (from April 3, 2025, to the date of the inaccurate overstatement) and prospectively (from the date of the inaccurate overstatement to the date the importer corrects the overstatement, as verified by CBP) to the full value of all automobiles of the same model imported by the same importer.  This clause does not apply to or otherwise affect any other applicable fees or penalties.

USMCA Automobile Parts

The ad valorem tariff of 25 percent shall not apply to automobile parts that qualify for preferential treatment under the USMCA until such time that the Secretary, in consultation with CBP, establishes a process to apply the tariff exclusively to the value of the non-U.S. content of such automobile parts and publishes notice in the Federal Register.

• Applies only to individual automobile parts as defined in by Annex I.

• Does not apply to automobile knock-down kits or parts compilations.

Drawback

No drawback shall be available with respect to the duties imposed.

Foreign Trade Zone

Any automobile or automobile part, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, that is subject to the duty imposed by this proclamation and that is admitted into a United States foreign trade zone on or after the effective date of this proclamation, in accordance with clause (1) of this proclamation, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.

For additional information, please refer to the Federal Register notice Adjusting Imports of Automobiles and Automobile Parts into the United States

Let us know if you have any additional questions. Reach out to your local NNR contact.