May 8th, 2025 – Effective May 3, 2025, a 25% tariff was imposed on certain imported automobile parts from all countries, as outlined in Presidential Proclamation 10908. The measure, issued under Section 232 of the Trade Expansion Act of 1962, is intended to address national security concerns related to the importation of automobile components.
Background
On March 26, 2025, the President signed Proclamation 10908, which imposes an ad valorem duty of 25% on select parts used in the assembly of passenger vehicles (including sedans, SUVs, crossovers, minivans, and cargo vans) and light trucks. This action applies to products classified under headings 9903.94.05 and 9903.94.06 of the Harmonized Tariff Schedule of the United States (HTSUS). Details were published in the Federal Register Notice 90 FR 14705 on April 3, 2025.
Key Tariff Classifications
- HTSUS 9903.94.05: Imposes a 25% tariff on designated parts for passenger vehicles and light trucks listed in subdivision (g) of U.S. Note 33 to subchapter III, chapter 99 of the HTSUS.
- HTSUS 9903.94.06: Applies a 0% tariff to parts that:
- Are eligible for special tariff treatment under the United States-Mexico-Canada Agreement (USMCA) (excluding knock-down kits); or
- Are not used in passenger vehicles or light trucks, even if listed in subdivision (g).
Entry Filing and Customs Procedures
Importers, brokers, and filers must ensure proper classification when submitting entries to U.S. Customs and Border Protection (CBP). Additional guidance can be found in CSMS #64018403, which covers entry summary reporting procedures for HTSUS Chapter 99 entries within the Automated Commercial Environment (ACE).
Foreign Trade Zone (FTZ) Requirements
Automobile parts entered into U.S. foreign trade zones (FTZs) on or after the effective date must be admitted in privileged foreign status (per 19 CFR 146.41). Upon withdrawal for consumption, these goods will be assessed duties based on the HTSUS classification and the applicable 25% tariff.
Other Considerations
- No drawback (refund of duties) is permitted on the additional tariffs imposed under this proclamation.
- The 25% duty applies in addition to any other applicable duties, including antidumping, countervailing, or other charges.
- Claims under Chapter 98 of the HTSUS remain valid, but any applicable tariffs must be calculated on the full value of the imported article.
- Chapter 99 provisions that offer reduced or duty-free treatment cannot override the imposed 25% tariff unless specifically exempted.
Summary
This tariff action represents a significant shift in U.S. trade policy affecting the automotive supply chain. All stakeholders, including importers, customs brokers, and manufacturers, must review their compliance processes to ensure accurate classification, valuation, and filing to avoid penalties or delays at entry.
Should you have any questions, please contact our Import Compliance team.
