US Imposes 25% Section 232 Auto Tariffs on Imported Cars and Key Parts

The proclamation builds on a 2019 Commerce Department investigation and on Proclamation 9888 of May 2019, and states that the negotiations contemplated at that time did not produce the agreements Section 232 envisages.

When the tariffs apply

For automobiles, the 25% tariff takes effect at 12:01 a.m. eastern daylight time on 3 April 2025. For automobile parts, it applies from a date to be set in a Federal Register notice, and no later than 3 May 2025. The White House fact sheet says the vehicles covered include sedans, SUVs, crossovers, minivans, cargo vans and light trucks, and that the parts covered include engines, transmissions, powertrain parts and electrical components, with a process to add further parts.

The USMCA carve-outs

Importers of vehicles qualifying under the United States-Mexico-Canada Agreement may submit documentation of the US content of each model. Once approved, the Section 232 auto tariffs apply only to the non-US content, calculated as the vehicle's total value minus its US content. If Customs and Border Protection finds that the declared content figures were inaccurate, the duty applies to the full value of the vehicle, retroactively from 3 April and for all vehicles of that model from the same importer, until a correction is verified.

USMCA-qualifying parts remain free of the new duty until the Commerce Department, working with CBP, sets up a process to apply it to their non-US content. Knock-down kits and parts compilations do not benefit from that exemption.

Other provisions

Within 90 days, Commerce must create a process for domestic producers or industry associations to request that further parts be added, with decisions due within 60 days of a request. Covered goods admitted into foreign trade zones must be admitted in privileged foreign status, and duty drawback is not available. Commerce will keep imports under review and may recommend further action or a change in the rate.

Who is affected

The fact sheet notes that around half of the roughly 16 million cars, SUVs and light trucks bought in the US in 2024 were imported. Foreign vehicle makers and parts suppliers exporting to the US, and US assemblers that rely on imported parts, now face higher landed costs from April. Importers should prepare US content documentation for USMCA models and review supply contracts for tariff allocation clauses.

Sources

• The White House: Adjusting Imports of Automobiles and Automobile Parts into the United States
• The White House: Fact Sheet on Section 232 tariffs on automobiles and automobile parts