U.S. to Impose 25% Tariffs on Imported Automobiles and Parts Starting April 3

This move follows a proclamation signed by President Donald Trump under Section 232 of the Trade Expansion Act of 1962, which allows for import restrictions when foreign competition is considered a threat to national security.

Effective April 3, 2025, a new 25% tariff will be applied to a wide range of imported automobiles and, soon after, to certain automobile parts.

The new tariffs target passenger vehicles and light trucks—including sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans—as well as automobile parts such as engines, transmissions, powertrain systems, and electrical parts.

According to a proclamation signed by Trump on March 26, 2025, the tariff will apply to imports entered for consumption, or those withdrawn from a warehouse for consumption, on or after 12:01 a.m. EDT on April 3, 2025.

A separate effective date for automobile parts will be announced in the Federal Register, with implementation being no later than May 3, 2025.

This 25% tariff is in addition to any existing duties or fees and will remain in effect unless expressly modified, reduced, or terminated through future announcements.

Preferential treatment for USMCA imports

The proclamation allows for special treatment of imported automobiles under the United States-Mexico-Canada Agreement (USMCA).

Importers may submit documentation to the Secretary of Commerce identifying the U.S. content value of each qualifying vehicle model. If approved, the 25% tariff will apply only to the value of the non-U.S. content and not to the full price of the vehicle.

However, strict compliance rules apply.

If U.S. Customs and Border Protection (CBP) finds that U.S. content has been overstated, the full 25% tariff will apply retroactively and prospectively to all imported automobiles of that model by the same importer.

The tariff will not be applied immediately to automobile parts. USMCA-compliant parts will continue to be duty-free until the Secretary of Commerce establishes a formal process for imposing tariffs on their non-U.S. content.

However, this provision applies only to individual parts—not to knock-down kits or parts compilations.

How enforcement will take place

The Secretary of Commerce will oversee the implementation and enforcement of the new tariff in coordination with CBP, the U.S. Trade Representative, and the U.S. International Trade Commission.

The Secretary is authorized to modify the Harmonized Tariff Schedule (HTSUS) and will do so by posting notices in the Federal Register.

Within 90 days, the Secretary must establish a process to add additional automobile parts to the scope of the tariff.

Industry groups and domestic producers will be allowed to petition for specific inclusions, and the Secretary shall issue a determination within 60 days.

Determinations will be issued in the Federal Register and will take effect the day after notice is published, but no later than 14 days after a decision is made.

Additionally, the following rules apply:

• Any covered goods entering a Foreign Trade Zone on or after April 3 must be admitted under “privileged foreign status,” which makes them subject to applicable duties upon consumption entry.
• The Secretary will continue to monitor imports and their effect on national security and may recommend additional actions by the President.
• No drawback will be available for duties paid under this tariff.
• The Secretary may issue regulations and guidance consistent with the proclamation, including to address operational necessity.
• CBP may take any actions necessary to enforce the proclamation.

Next steps for U.S. importers

U.S. importers must start preparing to comply with the new tariffs by:

• Determining whether their products fall under Annex I or subsequent annexes of the proclamation (to be published in the Federal Register).
• Starting the documentation process for U.S. content certification under USMCA.
• Speaking to a customs broker to ensure proper HTSUS classification.

How Cole International can help

At Cole International, we offer customs and compliance consulting services to help businesses navigate changing tariffs and trade regulations.

We also provide timely and efficient customs brokerage services to facilitate the entry of goods into the U.S.

If you import automobiles or parts into the U.S., please get in touch with one of our trade professionals to ensure full compliance and avoid unexpected costs or delays.