Sandler, Travis & Rosenberg, P.A. (ST&R) reports that on March 26, the President issued a proclamation imposing 25% tariffs on imported cars, light trucks, and specific vehicle parts under Section 232 of the Trade Expansion Act of 1962, citing national security concerns. These tariffs are based on a 2019 investigation and newly submitted information from the Commerce Secretary.

Tariff Details

  • Rate: 25% tariff in addition to existing duties.
  • Affected Products:
    • Automobiles: Passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks.
    • Certain Auto Parts: Engines, engine components, transmissions, powertrain parts, and electrical components.
  • Product Scope: Official definitions will be provided in ANNEX I, which is yet to be published.

Effective Dates

  • Automobiles: Tariffs take effect at 12:01 a.m. ET on April 3.
  • Auto Parts: Tariffs will take effect upon publication in the Federal Register, but no later than May 3.

USMCA-Originating Vehicles & Parts

  • Automobiles: Vehicles qualifying for USMCA preferential treatment may have tariffs applied only to the non-U.S. content. Importers must submit documentation proving U.S. content.
    • If U.S. Customs and Border Protection (CBP) finds inaccuracies, the full 25% tariff will apply retroactively to all entries of that model until corrections are verified.
  • Auto Parts: USMCA-originating parts will initially be exempt until the Commerce Secretary establishes a process to apply tariffs to non-U.S. content via a future Federal Register notice.

Process to Add Auto Parts to Section 232 Tariffs

The Commerce Secretary must create a process within 90 days (by June 24, 2025) to consider adding more auto parts to the tariff list. Requests must:

  • Come from a domestic producer or industry association.
  • Demonstrate that increased imports threaten national security.
  • Undergo review by the U.S. International Trade Commission (USITC) and CBP.
  • Be determined within 60 days of submission.
  • Be published in the Federal Register within 14 days of the decision, with tariffs taking effect the following day.

Additional Tariffs & Legislative Action

  • The President hinted at upcoming tariffs on lumber, pharmaceuticals, and possibly computer chips.
  • The Senate will vote on April 1 to terminate IEEPA tariffs on Canada. If affected, you may contact your Senators at (202) 224-3121 to express support for S.J. Res. 37.

Will provide updates when further details, including ANNEX I and Federal Register notices, are available.

 

Source: NCBFAA / ST&R Trade Advisory