President Trump has used his authority under Section 232 of the Trade Expansion Act of 1962 — the same authority used to impose tariffs on steel, aluminum, and copper — to impose a 25% tariff on automobiles and automobile parts. The action is grounded in a national security investigation originally initiated during the first Trump administration. The proclamation was issued March 26, 2025.
What HTS Codes Are Covered?
The full annex identifying specific HTS codes was published in the Federal Register on April 3, 2025 (90 FR 14705). The proclamation is available here.
Covered automobiles are passenger vehicles and light trucks classified under Chapter 87, including sedans, SUVs, crossover utility vehicles, minivans, cargo vans, and light trucks. Covered automobile parts span HTS Chapters 40, 70, 73, 83, 84, 85, 87, 90, and 94 — specifically parts designed for use in passenger vehicles and light trucks. General-purpose components not specifically intended for automotive use fall outside the scope.
Several new Chapter 99 subheadings were established to administer the tariff:
- 9903.94.01 — Covered passenger vehicles and light trucks subject to 25% tariff
- 9903.94.02 — Vehicles not classified as passenger vehicles or light trucks; U.S. content of USMCA-eligible vehicles (0% tariff)
- 9903.94.03 — Non-U.S. content of USMCA-certified passenger vehicles and light trucks (25% tariff on non-U.S. content only)
- 9903.94.04 — Passenger vehicles and light trucks manufactured at least 25 years prior to the year of entry (exempt)
- 9903.94.05 — Covered automobile parts subject to 25% tariff
- 9903.94.06 — USMCA-eligible automobile parts (currently exempt; 0% special duty)
When Do the Tariffs Take Effect?
The 25% tariff on automobiles took effect April 3, 2025. The 25% tariff on automobile parts took effect May 3, 2025.
USMCA Exemptions
USMCA treatment creates different results for vehicles versus parts. For USMCA-eligible passenger vehicles and light trucks, the 25% tariff applies only to the non-U.S. content of the vehicle — not the full value. Importers must obtain approval from the Secretary of Commerce to use this treatment. If CBP determines that a declared U.S. content value is overstated, the 25% tariff applies retroactively to the full value of the vehicle.
For USMCA-eligible automobile parts, the exemption is broader: USMCA-certified parts are fully exempt from the Section 232 tariff (not just the non-U.S. content portion), provided they are self-certified by the importer as intended for automobile production or repair in the United States. This exemption remains in place until Commerce and CBP establish a formal process to apply the tariff to non-U.S. content only and publish that procedure in the Federal Register.
Interaction With Reciprocal Tariffs
Automobiles and automobile parts subject to Section 232 duties are excluded from the reciprocal tariffs imposed under IEEPA. The anti-stacking executive order issued April 29, 2025 confirmed that the automobile and auto parts Section 232 tariffs take precedence over the reciprocal tariff in cases of overlap — meaning the two do not stack on top of each other. However, the automobile tariffs can stack with Section 232 steel and aluminum tariffs where both apply to the same product. Duty drawback is not available for automobiles, light trucks, or automobile parts covered by Presidential Proclamation 10908.
Update: Medium and Heavy-Duty Trucks and Buses — November 1, 2025
A separate Section 232 investigation into imports of trucks resulted in a new proclamation effective November 1, 2025, extending 25% tariffs to most medium- and heavy-duty vehicles (MHDVs) and their parts. Buses classified under HTSUS heading 8702 are subject to a reduced 10% rate. As with passenger vehicles, USMCA-eligible MHDVs may apply to have the tariff assessed only on non-U.S. content, pending Commerce approval. USMCA-eligible MHDV parts follow the same exemption structure as passenger vehicle parts — exempt until a formal non-U.S.-content process is established — except that knock-down kits and equivalent part compilations are subject to the full tariff regardless of USMCA status.
Manufacturers assembling MHDVs in the United States may apply for import adjustment offsets between 2025 and 2030, allowing a reduction in duty liability of up to 3.75% of the value of domestically assembled vehicles and engines.
Questions About Auto Tariffs?
The automobile and auto parts tariff rules — particularly around USMCA content calculations and the interaction with other Section 232 duties — are complex. Great Lakes Customs Law has been advising importers for more than 15 years. Call us at (734) 855-4999, send a text message, or reach us on W