New Tariff Relief Procedures for USMCA-Eligible Automobile Imports
Trade Update • May 20, 2025
n May 20, 2025, the U.S. Department of Commerce’s International Trade Administration (ITA) published a formal notice introducing procedures for automobile importers to claim reduced tariffs on eligible vehicles under the United States-Mexico-Canada Agreement (USMCA). These measures follow Proclamation 10908, which imposed a 25% tariff on certain imported automobiles starting April 3, 2025, and parts beginning May 3, 2025, as a national security measure under Section 232 of the Trade Expansion Act of 1962.
To ease the burden on North American trade, this new process allows eligible importers to submit documentation that isolates the value of U.S. content in their vehicles, ensuring the 25% tariff applies only to non-U.S. content.
Eligibility Criteria
Only vehicles meeting the following requirements are eligible:
- Imported from Canada or Mexico.
- Qualify for preferential tariff treatment under USMCA.
Vehicles from other countries or those failing to meet USMCA’s rules of origin are not eligible. Likewise, these procedures are separate from those that may apply to automobile parts referenced elsewhere in Proclamation 10908.
What Qualifies as “U.S. Content”?
“U.S. content” includes parts:
- Wholly obtained or
- Produced entirely in the United States or
- Substantially transformed in the U.S.
This definition is aligned with Article 4.1 of the USMCA, covering activities like manufacturing, processing, and assembling.
Documentation Requirements
Importers must submit documentation on a model line basis, certified by a senior corporate officer (e.g., CFO or General Counsel), detailing:
- Total declared customs value at the time of importation.
- Total U.S. content value per vehicle, calculated in line with 19 U.S.C. § 1401a.
- Non-U.S. content value, derived by subtracting U.S. content from the total value.
- Vehicle production location(s) and country of final assembly.
- Proof of USMCA eligibility, including:
- Origin certification
- Approved certifications for steel, aluminum, and labor value content
- Alternative Staging Regime (if applicable)
- Basic vehicle and importer details, including model year, make, importer of record number, and entry numbers if requesting retroactive treatment.
Submissions must be sent electronically to:
📧 Autos232USMCAContent@trade.gov
Review & Approval Process
The Department of Commerce will:
- Review documentation for completeness and compliance
- Request additional information if necessary
- Certify U.S. and non-U.S. content values
- Notify both the importer and CBP
If approved, the 25% tariff will apply only to the non-U.S. content of the imported vehicles. Determinations are valid for six months, after which updated submissions are required.
Retroactive Application
At the Secretary’s discretion, retroactive tariff relief may be applied to vehicles imported on or after April 3, 2025, provided the importer includes relevant entry numbers in their submission.
Penalties for Misreporting
If U.S. Customs and Border Protection (CBP) finds that an importer overstated U.S. content, the 25% tariff will apply retroactively and prospectively to the entire vehicle value, not just non-U.S. content. This could significantly increase costs for noncompliant importers.
Key Takeaway for Importers
Importers of USMCA-eligible automobiles should act swiftly to gather supporting data and submit required documentation. Approved submissions can lead to substantial tariff savings and reinforce the U.S. domestic auto supply chain—an explicit goal of the national security measures introduced in Proclamation 10908.
How GHY Can Help?
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.
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