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Update: Details on new 25% Tariffs on Autos, Light Trucks, and Auto Parts

 

US President Trump has issued a Proclamation imposing 25% tariffs on imported automobiles, light trucks, and certain vehicle parts under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. These tariffs are based on findings from a 2019 investigation, along with new information provided by the Secretary of Commerce.

Key Details from the Proclamation include:

Tariff Overview

  • A 25% tariff will apply to specified imports of automobiles and designated auto parts.

  • This tariff is in addition to any other duties currently applicable to the affected products.

Products Affected

  • Automobiles: Includes sedans, SUVs, crossovers, minivans, and cargo vans, as well as light trucks.

  • Auto Parts: Covers engines and engine components, transmissions and powertrain parts, and certain electrical components.

  • The detailed product list will be included in Annex I, which is not yet published. We will share it once available.

Effective Dates

  • Tariffs on automobiles will take effect at 12:01 a.m. ET on April 3.

  • Tariffs on automobile parts will be effective as specified in the Federal Register, but no later than May 3.

USMCA-Originating Vehicles and Parts

  • Automobiles: For vehicles qualifying under USMCA, importers can submit documentation identifying U.S. content. The 25% tariff will then apply only to the non-U.S. content.

    • U.S. content includes parts wholly obtained, produced entirely, or substantially transformed in the U.S.

  • Enforcement and Clawback:

    • If U.S. Customs and Border Protection (CBP) finds the declared non-U.S. content inaccurate, the full vehicle value will be subject to the 25% tariff.

    • This tariff will be applied retroactively to April 3 for all imports of the same model by that importer until the issue is corrected and verified by CBP.

  • Auto Parts: For qualifying parts under USMCA, the 25% tariff will not apply until the Secretary of Commerce establishes a procedure for applying it solely to the non-U.S. content, which will be announced in a forthcoming Federal Register notice.

Process for Adding Parts to Section 232 Tariff List The Secretary of Commerce must implement a process within 90 days (by June 24, 2025) to allow for the addition of new automobile parts to the Section 232 list. This process includes:

  • A request from a domestic producer or an industry association representing at least one domestic producer.

  • A demonstration that increased imports threaten national security or undermine the objectives of the Section 232 proclamations.

  • Consultation with the U.S. International Trade Commission (USITC) and CBP.

  • A determination issued within 60 days of request receipt.

  • Publication of the determination in the Federal Register within 14 days.

  • New tariffs will take effect the day after publication.

We expect further clarification and a full product list to be published soon in the Federal Register.and we will circulate that information as soon as it becomes available. During a post-signing press conference, President Trump signaled that additional tariffs may be forthcoming on lumber, pharmaceuticals, and computer chips, among other sectors.

Additional information is available on our website, www.transmodal.net/blog. Thanks.