The White House announced on March 26, 2025, that tariffs at the rate of 25% are being imposed on all automobile imports effective April 3, 2025, and on all automobile parts, effective May 3, 2025. These additional tariffs have been announced, referencing section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) (“Section 232”). Additional details defining the scope of automobiles and automobile parts subject to the increased tariffs have not yet been issued. Special considerations apply to automobiles that are subject to preferential treatment under the United States-Mexico-Canada Agreement (“USMCA”).

Here is What we Know as of March 27, 2025:

• Automobile imports will be subject to the 25% tariffs effective April 3, 2025.
• Automobile parts (details yet to be announced) will be subject to the 25% tariffs effective no later than May 3, 2025.
• The automobile import and automobile parts tariffs are in addition to all other tariffs and duties.
• For automobiles that qualify for preferential treatment under USMCA, tariff liability may be reduced by the value of “U.S. content” (as defined below) of the automobile by submitting documentation to the Secretary of Commerce substantiating the U.S. content. If the documentation is accepted, the additional 25% tariffs shall apply to the non-U.S. content only. If such documentation is found by Customs & Border Protection (“CBP”) to be inaccurate due to overstating the U.S. content, tariffs will be applied to the full value of the automobile (including retroactive application to any imports back to April 3 under the inaccurate statements).
  • “U.S. content” is defined as “the value of the automobile attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States.” Under this rule, Canadian or Mexican content would be subject to these additional tariffs. 
• For automobile parts that qualify for preferential treatment under USMCA, the additional tariff of 25% is suspended until the Secretary of Commerce, in consultation with CBP establishes a process of imposing these tariffs exclusively on the value of the non-U.S. content of the respective automobile parts. The process will be announced in the Federal Register.
  • The carve-out for tariffs pertaining to automobile parts qualifying for preferential treatment under the USMCA will not apply to automobile knock-down kits or parts complications. As such, only individual automobile parts are eligible to avoid the ad valorem tariff of 25% in connection with the USMCA.
• The additional tariffs are inapplicable for auto knock-down kits or compilations
• No duty drawback is available with respect to these additional tariffs.

No retaliation yet as of the morning of March 27, 2025

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Because these changes are ongoing, Dentons Cohen & Grigsby will continue to monitor these developments and provide additional updates. We provide our clients access to resources in Canada, Mexico, China, and globally to help navigate these rapidly changing trade measures.