New Tariff Policy Overview
Effective April 3, 2025, at 12:01 a.m. ET, the United States government has implemented significant new trade measures affecting the automotive industry:
· 25% tariff on all passenger vehicles (including sedans, SUVs, crossover utility vehicles, minivans, and cargo vans) imported into the U.S., regardless of country of origin
· 25% tariff on automotive parts (engines, transmission systems, powertrain components, and electrical parts) effective May 3, 2025, with potential expansion within 90 days
These measures were enacted by Executive Order under Section 232 of the Trade Expansion Act of 1962, citing national security concerns.
USMCA Exemption Provisions
The policy includes special provisions for USMCA partners Canada and Mexico:
- Indefinite transition period for qualifying vehicles and parts that meet USMCA requirements
- Exemption for US-originating content upon Department of Commerce approval
- Temporary full exemption for qualifying automotive parts until the Commerce Department establishes a mechanism to assess duties only on non-U.S. components
Importers must complete USMCA certification processes to qualify for these exemptions, which can be time-consuming due to product complexity.
Tariff Application Details
Key implementation considerations:
· Cumulative application: New tariffs are in addition to existing duties (March 2025 tariffs, steel/aluminum derivatives duties, and standard MFN rates)
· Maximum potential rate: Non-USMCA vehicles from Canada/Mexico face combined tariffs up to 77.5%
· Strict enforcement: Severe penalties for misrepresentation of origin, including retroactive application to April 3, 2025
· No duty drawback: Tariff payments are not eligible for drawback programs
Compliance Recommendations
Importers should take immediate action to:
- Evaluate USMCA eligibility for all affected products
- Complete certification processes as soon as possible
- Review customs bond coverage to account for increased duty liabilities
- Implement rigorous origin verification systems to avoid penalties
For complete policy details and justification, refer to the official White House Fact Sheet.
Note: This summary provides an overview of complex trade regulations. Importers should consult with customs specialists and legal counsel for specific guidance.