Tariff Talk

The collective efforts by U.S. automotive manufacturers to address growing tariff burdens were rewarded with partial relief from the administration this week. The order outlines the previous proclamations and directives affecting automobiles and auto parts, as well as steel, aluminum, and their derivative articles.

“I have now determined that, to the extent these tariffs apply to the same article, these tariffs should not all have a cumulative effect (or ‘stack’ on top of one another), because the rate of duty resulting from such stacking exceeds what is necessary to achieve the intended policy goals,” said President Trump.

Tariffs specific to the automotive vehicle and parts sector are now exempt from additional general steel and aluminum tariffs, meaning the industry-specific tariffs will not have further steel or aluminum duties stacked on top. Changes to the tariff schedule must be completed by May 16, and the order is retroactive to March 4. Updated guidance on implementation is expected. In summary:

Automobiles & Auto Parts: Articles subject to the March 26 Automobiles and Automobile Parts tariffs will not also be subject to Section 232 tariffs on steel, aluminum, or their derivatives.

Canada & Mexico: Articles subject to the 25% IEEPA tariff targeting the flow of illicit drugs from Canada or Mexico (for non-USMCA-qualified goods) will not also be subject to global Section 232 tariffs on steel, aluminum, or their derivatives.

Steel & Aluminum: If an article contains both metals and is subject to both the global aluminum and steel Section 232 tariffs, both tariffs will continue to apply.

Other Tariffs: Any other applicable tariffs, including general duty rates and antidumping duties, will continue to apply and may still be stacked.

In tandem, a presidential proclamation was issued to provide additional relief to U.S. automobile manufacturers outside of the import process. This includes a Section 232 tariff adjustment offset for vehicles assembled in the U.S., “by reducing duties assessed on automobile parts accounting for 15 percent of the value of an automobile assembled in the United States for 1 year and equivalent to 10 percent of that value for an additional year,” stated the President. The proclamation outlines a process that requires filings reflecting MSRP, tariffs paid, and evidence that the parts were used in U.S. vehicle assembly—not for commercial resale.