Editor’s Note
Welcome to the May 2025 edition of Plugged In! As tariffs continue to dominate headlines—and create headaches—in the auto world, Mark Heusel and Hezi Wang offer a Tariff Tracker to help businesses navigate the ever-shifting landscape. Plus, in a roundup of recent headlines, Michael Gillum and Hezi Wang highlight a bold new EV startup making waves with early reservations for its budget pickup, explore the latest developments in rare earth exports as China’s new controls collide with easing U.S.-China tariffs, and note proposed legislation that may significantly impact EVs.
Heather Frayre | Member Partner
Tariffs: Is it really the most beautiful word in the dictionary?
President Trump has repeatedly stated that tariffs are the “most beautiful word in the dictionary.” While those in and around the auto industry may disagree with the President’s choice of adjectives, most will agree that “complexity,” “complicated,” and even “confusing” are all attributes of the term – and perhaps more descriptive of its impact on the marketplace. In fact, ever since tariffs roared back into our psyche in February, most of the calls we have received are from small American companies trying to navigate overlapping, interweaving, and multi-layered tariffs that change constantly and confound even the most dedicated student. Seeing first-hand how this has befuddled importers and the customs community alike, importers have often under-estimated the total tariff bill, especially when it comes to goods imported for the auto industry.
In this environment of uncertainty, it is not surprising that importers frequently ask questions aimed at clarifying how these tariffs apply to their specific situations. Does this tariff apply under these circumstances, or is it excepted because another applies? What about the original 301s? Where do I find the amount of the tariffs, and when does a new rate apply? These questions and many more have been the constant chatter for weeks, going on months. While we have reported on tariffs now for just about a year, it seems that we are often only adding to the concerns and impacts already felt in the market. And, honestly, there has been no shortage of attempts to bring sense to understanding the tariffs, only to be frustrated by a new social media post, Executive Order, or incomplete news article. This has left the auto industry in general, and the EV community in particular, in a state of confusion.
Therefore, rather than pen another article that highlights the impact of the tariffs or promises how to mitigate your risk, our task force thought we would offer up a more constructive tool to understanding the current state of tariffs: Our Tariff Tracker. We are crossing our fingers that there is not another “new” development before we go to press and that the information will be up to date for at least a few weeks. Our goal is to remove some of the confusion and help our readers understand where the state of tariffs stand today, and we mean that literally. Our Tracker looks at a broad range of automotive products and highlights batteries as a way of demonstrating the complexity associated with calculating tariff rates. We hope you find this tool useful in shedding further light on the current tariffs.
Tariff Tracker
Chart by Country of Origin (As of May 14, 2025)
Mark Heusel | Member Partner | East Asia Practice Group Chair -
China, Taiwan, Japan, Korea, ASEAN Region
Hezi Wang | Counsel and East Asia Legal Coordinator
A new startup company, Slate Auto, is making a bold entrance into the burgeoning EV market in the U.S. by securing more than 100,000 reservations for its new low-cost electric pickup truck in just over two weeks. The company claims the truck will start below $27,500. It is to be manufactured at a former printing plant in Warsaw, Indiana, with deliveries beginning at the end of 2026. The truck itself is bare bones compared to its rivals and designed primarily with manufacturing and cost efficiency in mind.
The focus on serving the mass market with this low-cost option seems to have garnered the initial attention from consumers that is crucial in the competitive EV manufacturing environment. 16 investors, one of whom is reported to be Jeff Bezos, have committed more than $111 million in support of this new market entry. Only time will tell if this no-frills EV option will continue to capture the attention of the U.S. consumer.
(2) Rare Earth Exports in the Spotlight after U.S.-China Tariff Suspension
In early April 2025, China imposed export controls on several rare earth metals critical for various industries, including electric vehicle (EV) production. The new regulations require exporters to apply for permits, making it more difficult for U.S. companies to access these essential resources. The White House subsequently in late April 2025 launched a Section 232 investigation into the national security risks posed by U.S. reliance on imported processed critical minerals and their derivative products.
However, following the recent suspension of the U.S.-China tariffs, there are signs that U.S. customers may have an easier time securing export licenses. While a complete removal of the restrictions is unlikely, sources within the industry suggest that the Chinese Ministry of Commerce could expedite the approval process, which normally takes up to 45 days. This shift is expected to benefit U.S. companies as they face mounting pressure to secure critical inputs for electric vehicle production.
(3) The One-Big-Beautiful-Bill
Last week, the House Ways & Means Committee introduced its anticipated tax cut bill. The bill introduces severe and profound changes to the Inflation Reduction Act’s 30D clean vehicle credits and the advanced manufacturing credits. Importantly, the bill proposes phasing out the $7,500 consumer credits for clean new vehicles by December 31, 2025, with limited exceptions, and the bill dramatically impacts the ability of U.S. companies to cooperate with prohibited foreign entities (including those from China) in the development of the EV sector in the U.S. While changes to the bill are anticipated, it does appear that the IRA is under siege.
Hezi Wang | Counsel and East Asia Legal Coordinator
K. Michael Gillum | Japanese Business Legal Coordinator
[1] USMCA requires that automotive parts undergo either a tariff shift and/or meet minimum regional value content requirements (e.g., most parts require between 65% -75% North American content).
[3] On May 15, 2025, CBP issued a guidance, clarifying the application of the Executive Order 14289 Addressing Certain Tariffs on Imported Articles (“Non-Stacking Measures”).
[4] As announced by the White House on May 12, 2025, the previous 125% reciprocal tariff has been decreased to 10% for 90 days. As of May 12, 2025, no additional exemptions have been announced. Prior to the May 12, 2025 announcement, China faced up to a 245% tariff on imports to the United States. This included a 125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5% and 100%. The reciprocal tariffs have been reduced to 10% for 90 days.
[5] Articles that qualify under the USMCA are eligible for special tariff treatment and are designated with an "S" in Column 1 – Special of the HTSUS.
[View source.]
