On March 27, 2025 President Trump issued an Executive Order which imposed an 25% import duty under Section 232 on the following auto/auto-related products: 1) passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans); 2) light trucks; and 3) certain automobile parts (engines and engine parts, transmissions and powertrain parts, and electrical components). Read the Proclamation HERE. While the exact HTS codes covered will not be known until the EO and annex are published in the Federal Register, which should be in the next few days, the EO appears to cover the same scope of parts as those described in the original 2019 investigation. See below. Importantly, these new auto 232 tariffs are additive, meaning in addition to existing duties, fees, and charges. The tariffs will be effective on April 3, 2025, as to passenger vehicles and light trucks, and no later than May 3, 2024, for parts. However, it is important to note that there are many automobile parts which are included within the Aluminum Derivative Products list recently published.
In terms of vehicles, passenger vehicles and light trucks that qualify for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA) will not be eligible for a full exemption from these Section 232 tariffs; however, no duties will be owed on the value of the U.S. content within each vehicle. The EO specifies that U.S. content means components that are wholly obtained, produced entirely, or substantially transformed in the United States. The order also states that if the declared value of U.S. content is found inaccurate, duties will be owed on the full value of the vehicle regardless of its actual U.S. content.
Regarding automotive parts, those that qualify for USMCA preferential treatment may be exempt from the new duties. This exemption remains effective until Commerce announces in the Federal Register that a process has been instituted to apply the duties solely to the value of non-U.S. content. The exemption applies only to individual parts subject to the duties and does not extend to knock-down kits or compilations of parts. Furthermore, the Executive Order mandates that Commerce establishes a procedure within 90 days of publication to include additional automotive parts within the scope of the tariffs.
