Proclamation Released Governing Auto Parts Tariffs
Automakers who build cars in America and import parts to do so will get a partial credit against the costs of 25% Section 232 tariffs on non-USMCA qualifying parts -- but the Commerce Department will examine companies' projections of both how many cars and light trucks they expect to build in the U.S. between April 3, 2025 and April 30, 2026, and the aggregate value of the MSRP of those vehicles.
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The proclamation sets no limits on how the MSRP is set, but does set a limit on the credit -- it can't exceed the Section 232 auto tariff liability for imported parts -- so it can't be used to offset tariff liability for completed vehicles.
"A manufacturer with an approved import adjustment offset amount may determine the importers of record eligible to decrement against that manufacturer’s import adjustment offset amount, and that list of importers of record may include suppliers in that manufacturer’s supply chain for automobiles assembled in the United States if the manufacturer so chooses," the proclamation says.
Automakers have 30 days to produce these projections, including where the vehicles will be assembled, as well as documentation on the projected tariff costs for imported automobile parts for those U.S.-assembled models, broken down by direct costs to the car company and costs its suppliers will incur.
This documentation will also need to identify importers of record, including their IOR numbers, eligible to use the offset credit, the amount of the offset allotted to each. A senior officer must sign, "attesting under penalty of perjury that the information submitted ... is true, complete, and accurate to the best of the manufacturer’s knowledge, and that the manufacturer has conducted reasonable due diligence to verify the accuracy of the assertions and facts contained in its submissions."
Once the Commerce Department verifies the submission is complete and accurate, it will notify CBP, and send the information CBP needs to administer the credit.
"CBP shall confer the approved offset amount to the approved importer(s) of record using processes and mechanisms consistent with CBP’s operational framework and tariff administration procedures, including offset against current tariff obligations due at the time of entry, or other lawful methods," the proclamation says.