Yesterday, President Trump signed a proclamation imposing a 25% tariff on imports of automobiles and certain automobile parts under Section 232 of the Trade Expansion Act of 1962.
The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components). For automobiles, the tariffs take effect on April 3, 2025, and for automobile parts, on the date specified in the Federal Register to be issued, but no later than May 3, 2025.
The proclamation directs the Secretary of Commerce to establish a process to expand tariffs to additional automobile parts in the coming months.
Importers of automobiles under the United States-Mexico-Canada Agreement (USMCA) will be given the opportunity to certify their U.S. content and the 25% tariff will only apply to the value of their non-U.S. content. Importers who overstate value of U.S. content would face tariffs on full values of the automobiles.
USMCA-compliant auto parts will remain tariff-free until Commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content and publishes notices in the Federal Register.
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