On 26th March 2025, the U.S. President signed a presidential proclamation imposing additional 25% tariffs on imports of automobiles (sedans, sports utility vehicles, crossover utility vehicles, minivans, cargo vans and light trucks) and certain automobile parts (engines, transmissions, powertrain parts, and electrical components) pursuant to the authority granted by Section 232 of the Trade Expansion Act, 1962. The tariffs on automobiles will be effective on 3rd April 2025 and the effective date for tariffs on automobile parts would be notified later, by 3rd May 2025.
The proclamation provides that the importers of automobiles under the United States-Mexico-Canada Agreement (USMCA) will be given an opportunity to certify their US content. Further, a system would be implemented so that the 25% additional tariffs will only apply to the value of their non-US content. The decision has been taken to protect and strengthen the automotive sector in the USA.
The complete list of products presently subject to duties covers products from HS Chapters 40, 70, 73, 83, 84, 85, 87, 90 and 94. Importantly, the Proclamation provides that additional automobile parts may be added to the list upon the request of the domestic producers. Such requests shall lie to the Secretary of Commerce, who will assess if there has been an increase in imports of a part and whether it threatens to impair national security. The Proclamation directs the Secretary of Commerce to notify within 90 days the relevant procedures for domestic producers to make such requests.
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