U.S. Increases Tariffs on Vehicles and Automotive Parts

President Donald Trump signed a proclamation on March 26, 2025, invoking Section 232 of the Trade Expansion Act of 1962 to impose an additional 25 percent tariff on imports of vehicles and certain automotive parts.

According to the proclamation, the new tariff must be applied as follows:

• The 25 percent tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks starting at 12:01 a.m. EDT on April 3, 2025.
  • The Federal Register will publish Annex I to this proclamation to specify which vehicles will be subject to the new tariff.
• The 25 percent tariff will also be applied to imported key automotive parts such as engines, transmissions, powertrain parts and electrical components on the date that will be specified in the Federal Register, which will be no later than May 3, 2025.
  • The Federal Register will publish Annex I to this proclamation to specify which automotive parts will be subject to the new tariff.
  • If necessary, processes will be implemented to expand the new 25 percent tariff to additional automotive parts.
• For vehicles imported under the United States-Mexico-Canada Agreement (USMCA), it may be possible to provide information to the U.S. Department of Commerce secretary regarding the U.S. content in each model. Thereafter, the secretary may approve applying the new 25 percent tariff exclusively to the value of the non-U.S. content of the vehicle.
• For automotive parts, the new 25 percent tariff shall not apply if they are originating under the USMCA, until the Secretary of Commerce establishes a process to apply the tariff exclusively to the value of the non-U.S. content.
• Finally, it is important to note that the new 25 percent tariff is in addition to any other duties, fees, exactions and charges applicable to vehicles and parts.

This poses a significant challenge for exporters, as it will be necessary to break down the percentage of content and value of these inputs to calculate the U.S. content. It is important to note that these provisions may conflict with the USMCA.

Holland & Knight has extensive experience in customs matters and the complex process of content and origin traceability for proper compliance.

Please contact the authors for further information.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.