On April 29, 2025, President Trump issued a Proclamation (the “Proclamation”) amending the tariffs applicable to imports of automobiles and automobile parts. For a complete discussion on the tariffs imposed on automobiles and automobile parts, see our separate blog posts here and here.
The Proclamation issued on April 29th, amends Proclamation 10908 which first imposed a 25% tariff on imports of automobiles and automobile parts identified in the Annex by the product’s Harmonized Tariff Schedule (“HTSUS”) classification. The Proclamation provides a offset calculation structure which will allow automobile manufacturers to apply for 15% offsets in the first year and a 10% offset in the second year.
The amendments to Proclamation 10908 include the following:
- A reduction in duties assessed on automobile parts accounting for 15 percent of the value of an automobile assembled in the United States for 1 year and equivalent to 10 percent of that value for an additional year as follows:
- For automobiles assembled in the United States, automobile manufacturers shall be eligible to receive an import adjustment offset amount applicable to Section 232 duties on automobile parts based on the following schedule:
- (i) The automobile manufacturer may apply for an import adjustment offset amount equal to 3.75 percent of the aggregate Manufacturer’s Suggested Retail Price (MSRP) value of all automobiles assembled in the United States from April 3, 2025, through April 30, 2026.
- (ii) The automobile manufacturer may apply for an import adjustment offset amount equal to 2.5 percent of the aggregate MSRP value of all automobiles assembled in the United States from May 1, 2026, through April 30, 2027.
The percentage rates outlined in subsections (i) and (ii) were reached by multiplying the 25% automobile and automobile parts tariff rate by 15% for the first year offset amount to reach 3.75% and then multiplying the 25% automobile and automobile parts tariff rate by 10% to reach a 2.5% rate.
The amendments only apply to automobiles that undergo final assembly in the U.S. Furthermore, the amendments only apply to importers authorized by manufacturers and the amount may only be used to offset tariff liability related to that manufacturer’s automobile parts tariff liability. The relief is capped at the total amount of the automobile parts tariff liability and cannot be used to offset any additional tariff liability.
The Proclamation directs the Secretary of Commerce to establish a process for importers to submit adjustment offset amounts to include documentation requirements certifying certain information including the number of automobiles projected to be assembled in the U.S., projected cost of tariffs due to the imported parts, total import adjustment offset amount requested, documentation identifying the importers of record, and other documentation requirements.
Once an importer submits the necessary documentation to the Secretary of Commerce, the application will be approved and notice will be provided to U.S. Customs and Border Protection (“CBP”) to administer and implement the adjustment offset amount.
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