U.S. Applies a 25% Tariff on Imports of Autos and Parts (Duty Offset For Auto and MHDV Parts)

Published April 2, 2025 | Updated June 30, 2026

Key Points

• A 25% tariff took effect on April 3, 2025, for imported automobiles and light trucks, and on May 3, 2025, for specific auto parts such as engines, transmissions, and electrical components.

• The automobile and auto-parts duties under Proclamation 10908 apply to passenger vehicles and light trucks. Separate Section 232 duties apply to medium- and heavy-duty vehicles, their parts, and buses under Proclamation 10984.

• On October 31, 2025, CBP issued guidance outlining the import adjustment offset process for automobile parts subject to Section 232 duties.

• Latest: On June 29, 2026, CBP issued updated guidance extending the import adjustment offset to medium and heavy-duty vehicle (MHDV) parts.

I​​​​​​​​n a decisive move to bolster America’s domestic automotive industry and address long-standing national security concerns, President Donald J. Trump has issued a sweeping new Proclamation – Adjusting Imports Of Automobiles And Automobile Parts Into The United States.

On October 31, 2025, U.S. Customs and Border Protection (CBP) issued guidance on Duty Offset for Imports of Automobile Parts, providing entry filing instructions for importers eligible to apply an import adjustment offset under Section 232 tariffs.

Latest Update: On June 29, 2026, CBP issued updated guidance (CSMS #69087399) on Duty Offset for Imports of Automobile and Medium and Heavy-Duty Vehicle (MHDV) Parts. This message updates CBP’s October 31, 2025 guidance on the automobile parts offset and provides new instructions for the offset on MHDV parts. More details on the CBP guidance below.

Imports Affected

Effective April 3, 2025, a 25% ad valorem tariff was imposed on:

• Imported automobiles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks.

Effective May 3, 2025, a 25% ad valorem tariff was imposed on:

• Automobile Parts: duty applies to auto parts on passenger vehicles and light trucks (engines and engine parts, transmissions and powertrain parts, and electrical components, and parts of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks. Following Proclamation 10984, MHDV parts also became subject to Section 232 duties and are now eligible for the import adjustment offset described below.

Full listing of products affected can be found through the Federal Register Automobiles and Automobile Parts, Imports Into U.S.; Adjustment (Proc. 10908), alternatively also accessible via PDF format.

Notably, vehicles qualifying for preferential treatment under the United States-Mexico-Canada Agreement (USMCA) may be partially exempt from full tariffs if importers can substantiate the proportion of U.S.-sourced content in each vehicle. In such cases, and upon approval from the Secretary of Commerce, the tariff would only apply to the value of non-U.S. content. However, any misrepresentation of this content could result in retroactive and prospective application of the full 25% tariff on all affected imports, a move designed to deter manipulation of import declarations.

Updated Guidance: Duty Offset for Automobiles and MHDV Parts

Entry Filing Instructions

• The offset can only be used up to the amount approved by the Department of Commerce (DOC) and only for tariffs imposed under Proclamations 10908 and 10984, as amended.
• Importers must enter the DOC-issued automobile or MHDV parts offset license number in the Importer Additional Declaration Field (Type Code 11) in ACE, following the 8-character format AANNNNNN (with “A” as letters and “N” as numbers).
• The offset applies to automobile parts classified under HTSUS 9903.94.05 or 9903.94.07 and, under the updated guidance, also to MHDV parts classified under HTSUS 9903.74.08 or 9903.74.09. The same import adjustment offset amount may be used to reduce tariff liability on automobile or MHDV parts under Proclamations 10908 and 10984, as amended.
• Importers should track the usage of each offset license so they do not exceed the total amount granted. The TR-015 report is available in ACE to help importers monitor their usage. Importers who exceed the amount of an offset license are liable for the Section 232 duty on the overage and may be subject to penalty action under 19 U.S.C. 1592.

Tariff Application by Country

For automobile parts from Japan, South Korea, Taiwan, the UK, and the member countries of the EU (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia (Czech Republic), Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden), the additional tariff for automobile parts is calculated based on the difference between the column one duty rate and the 232 duty rate. Only the portion assessed under the 232 duties may be offset.

Example: Automobile parts of the UK imported under HTSUS 9903.94.32 are subject to a total tariff of 10% (including any column one tariffs). Only the portion assessed under the Section 232 duties, the difference between 10 percent and the column one rate, may be offset.

When claiming the import adjustment offset:

• Continue to file automobile parts under HTSUS 9903.94.05 or 9903.94.07, or MHDV parts under HTSUS 9903.74.08 or 9903.74.09. For automobile parts from Japan, the United Kingdom, member countries of the European Union, South Korea, and Taiwan, instead file under HTSUS 9903.94.43, 9903.94.55, 9903.94.32, 9903.94.33, 9903.94.53, 9903.94.45, 9903.94.63, 9903.94.65, 9903.94.67, or 9903.94.69;
• File zero (0) for the duty amount on the Chapter 99 HTSUS; and
• File the column one duty amount on the Chapter 1 to 97 HTSUS when the license number is submitted on the entry summary line.

When claiming an import adjustment offset, if submitting HTSUS 9802.00.40, 9802.00.50, 9802.00.60, or 9802.00.80 on the same entry summary line with the automobile or MHDV parts Chapter 99 classification, file zero (0) for the duty amount on these Chapter 98 classifications.

Additional Guidance

• Automobile and MHDV parts remain subject to Section 232 duties under Proclamations 10908 and 10984, as amended, even when an offset reduces the payable amount.
• Importers filing automobile or MHDV parts Chapter 99 HTSUS with the offset license number are not subject to Section 232 metals or wood duties. Per CBP’s latest guidance, no Chapter 99 HTSUS code is needed for the exemption from the other remedies noted in the proclamations.
• Importers may file a Post Summary Correction (PSC) to request refunds on previously paid Section 232 duties if eligible offsets apply.

For technical assistance, importers may contact their assigned CBP Client Representative or the ACE Help Desk. For inquiries regarding trade remedy programs, visit cbp.gov/trade/programs-administration/trade-remedies or email TradeRemedy@cbp.dhs.gov.

Background

The action stems from a years-long investigation initiated under Section 232 of the Trade Expansion Act of 1962. In 2019, the Secretary of Commerce found that the high volume of imported vehicles and critical parts was undermining the U.S. automotive manufacturing base — a sector considered vital to national defense. President Trump acknowledged these findings in Proclamation 9888 later that year, directing negotiations with key trade partners, including the European Union and Japan. However, no sufficient agreements were reached to address the issue.

Future Flexibility and Expansion

The proclamation also provides a pathway to expand the list of tariffed parts based on evolving industry conditions. The Secretary of Commerce is tasked with establishing a formal process, within 90 days, allowing domestic manufacturers and industry groups to request the inclusion of additional parts if import trends pose a further threat to national security.

In addition, the administration may impose tariffs on foreign trade zone entries of automobiles and parts unless they meet strict domestic status requirements, closing another potential loophole for tariff avoidance.

A Strong Message to Global Competitors

This latest move represents a continuation of the Trump administration’s protectionist approach to trade policy, asserting that a strong domestic manufacturing base is essential for economic stability and national security. The administration has expressed disappointment in the outcomes of prior trade agreements and legislative efforts, arguing that they failed to sufficiently revitalize the sector.

Looking Ahead

While the proclamation provides for continued monitoring and possible future adjustments, it underscores a renewed commitment to reinforcing American automotive manufacturing. Whether these tariffs will lead to long-term reshoring of production or provoke retaliatory measures from trade partners remains to be seen.

For now, automakers, suppliers, and international trading partners must prepare for a new phase in U.S. trade policy — one that places national security and industrial resilience at the forefront.

The information presented is general in nature, and is not intended to constitute legal advice with respect to any event or occurrence, and may not be considered as such.​​ Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.​ Due to the complexity of Customs Regulations, valuations are based on information currently available and should not be considered binding, we recommend obtaining National Customs Rulings in areas of uncertainty.​

How GHY Can Help?

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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.

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