President Trump issued a Presidential Proclamation which imposes a 25% tariff on imports of automobiles, effective on April 3, 2025, and a 25% tariff on imports of automobile parts, effective no later than May 3, 2025.

This action is taken pursuant to Section 232 of the Trade Expansion Act of 1962, the same provision that has been used to impose 25% tariffs on imports of steel and aluminum.

A Federal Register notice will identify the Harmonized Tariff Codes of the automobiles and automobile parts covered the Presidential Proclamation.  It will also specify the effective date for the Section 232 tariff on automobile parts.

The major terms of the Presidential Proclamation are:

For automobiles that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA), importers may submit documentation to the U.S. Commerce Department identifying the amount of U.S. content in each model imported into the United States.  “U.S. content” refers to “the value of the automobile attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States.”  With Commerce’s approval, such automobiles will be eligible to apply the 25% tariff exclusively to the value of the non-U.S. content of the automobile.  The non-U.S. content of the automobile will be calculated by subtracting the value of the U.S. content in an automobile from the total value of the automobile.

If U.S. Customs and Border Protection (CBP) determines that the declared value of non-U.S. content of an automobile is inaccurate due to an overstatement of U.S. content, the 25% tariff will apply to the full value of the automobile, regardless of the actual U.S. content of the automobile.

The 25% tariff will not apply to automobile parts that qualify for preferential treatment under the USMCA until such time that Commerce, in consultation with CBP, establishes a process to apply the tariff exclusively to the value of the non-U.S. content of such automobile parts and publishes a notice in the Federal Register.

Within 90 days, Commerce will establish a process for including additional automobile parts within the scope of the Section 232 tariffs.  This process will be open to domestic producers of automobiles or automobile parts.

These tariffs will be in addition to any other duties on imported automobiles and automobile parts, such as any antidumping and/or countervailing duties; the special tariffs on imports from Canada, Mexico, and China; the Section 301 tariffs on imports from China; and any “reciprocal” tariffs that are scheduled to be announced next week.