New Tariffs on Imported Automobiles and Imported Automobile Parts

On March 26, 2025, the White House announced new tariffs on imported automobiles and imported automobile parts as part of section 232 of the Trade Expansion Act of 1962, which protects domestic industries.  These tariffs are in addition to those imposed on products of Mexico, Canada, and China, and those tariffs imposed on imported steel and aluminum.

Specific requirements for imported automobiles:

• Starting on April 3, 2025, all imported passenger vehicles will be subject to a 25% tariff, including sedans, sport utility vehicles, crossover utility vehicles, minivans, cargo vans, and light trucks.  Imported automobiles that include U.S. parts or materials and qualify as originating in North America under the US-Mexico-Canada agreement, must pay the 25% tariff on the value of any non-U.S. parts or materials. 
• If U.S. Customs and Border Protection (“CBP”) determines that an importer has overstated the value of U.S. parts or materials in any automobile model imported during the time that this order is in place, CBP is directed to apply the 25% tariff to the full value of the vehicle for all same-model automobiles imported by the same importer both retroactively, from April 3, 2025, to the date of the incorrect overstatement, and prospectively, until the date the importer corrects the overstatement as verified by CBP.
• Importers of automobiles that are shipped into a foreign trade zone while this order is in effect must pay these 25% tariffs when the automobiles enter into the United States.
• Importers cannot receive a refund of the 25% tariff when exporting the automobile out of the United States.

Specific requirements for imported automobile parts:

• Starting on May 3, 2025, certain imported automobile parts, such as engines and engine parts, transmissions and powertrain parts, and electrical components, will be subject to a 25% tariff.  Imported parts that include U.S. content, such as steel, and qualify as originating in North America under the US-Mexico-Canada agreement, must pay the 25% tariff on the non-U.S. content. 
• A complete list of covered automobile parts will be detailed in the Federal Register in the coming days, but automobile suppliers should note that the covered automobile parts list may be expanded during the time that this order is in place.
• Importers of automobiles parts that are shipped into a foreign trade zone while this order is in effect must pay these 25% tariffs when the parts enter into the United States.
• Importers cannot receive a refund of the 25% tariff when exporting the automobile parts out of the United States.

Additional reciprocal tariff announcements and tariffs on targeted products and countries are expected to be announced in the coming days. 

In the United States, tariffs are collected by CBP from the importer of record, which is the party that owns or has purchased the products being imported.  The importer of record is responsible for properly declaring the value, classification, and country of origin of entered products, as well as paying duties, taxes, and other fees.

Honigman’s Regulatory & Executive Order Task Force is closely monitoring developments and offering guidance to help businesses navigate these changes. Please reach out to Angela Gamalski, Chauncey Mayfield, or another member of the Regulatory Practice Group or Commercial Transactions Practice Group with any questions or for further assistance in navigating these changes.