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New "easing" of Auto Part Tariffs

  • David Carr
  • Apr 29
  • 2 min read


President Trump offered some relief for US auto makers on 4/29/2025 by signing a new proclamation aimed at easing some of the distress due to tariffs. The proclamation, in a nutshell, allows auto makers that assemble their cars in the US to create a report to get a reimbursement of up to 3.75% of the total value of automobiles made from May 1, 2025 to April 30, 2026 and up to 2.5% of the total value of all automobiles that they put together in the US from May 1, 2026 to April 30, 2027.


Reading the actual proclamation is difficult but the math works out like this: Imagine you're an automobile manufacturer, you're still paying 25% on foreign auto parts in 2025. However, you have a kind of credit pool, if you will, to draw from that is based on the total value of 25% auto tariffs used in 15% of the value of the automobiles you build during the year. You need to file paperwork that boils down to a request for the amount of tariff offset you're applying for, so long as it's not greater than 3.75% of the total value of all vehicles you'll put together in the us. In the documentation you'll need an estimate of the number of the automobiles you'll build in the US and the location and information on the plants where this will happen, an estimate of the cost of the tariffs on the auto parts you'll use in the manufacturing process, information on the importer(s) of record complete with an allocation of the amount of the offset that each individual importer can use, and an affidavit by a plant or manufacturing manager attesting to the report's veracity and accuracy.


After you get all that information together, the Secretary of Homeland Security will issue an order to CBP to set up the offsets associated with each importer of record. How exactly you use the offset is a little unclear and left up to CBP discretion in the proclamation. It could be an average applied to each shipment, which would seem the best path for CBP to combat any... irregularities.


Now, the tariff relief is only open to manufacturers that are finishing automobiles in the United States. Auto Parts themselves, not being put to an assembly line to make a finished product in the US cannot claim this offset. Auto part stores importing auto parts into the use cannot claim this offset. It is relatively specific in its reach. Additionally, the offset is only for what amounts to a more or less fiscal year 2025 (beginning May 1) and 2026. After such time, regular 25% tariffs on all parts imported will resume. There are some additional rules around 232 auto tariffs that I'll talk about in the next blog since it will make more sense to talk about order and stacking tariffs in that blog than here, so stay tuned...



 
 
 

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