Commerce Announces Process to Reduce Vehicle Section 232 Tariffs
The Commerce Department estimates that automakers will be able to save about $10 billion annually in tariffs on USMCA-qualifying cars, trucks and minivans imported from Canada or Mexico by submitting documentation to the International Trade Commission about the U.S. content in those vehicles. However, that estimate assumes that 25% tariffs on imported cars do not change the buying patterns of U.S. consumers, nor the production choices of automakers.
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The Commerce Department said that's assuming that over 3.7 million USMCA-qualifying vehicles are imported next year, with a valuation of about $102 billion. The importers would still owe $15 billion annually in tariffs, according to this estimate on vehicles that entered duty-free before the Section 232 25% tariffs on cars and light trucks was imposed in April.
Automakers will have the opportunity to claim refunds for the U.S. content of these vehicles imported after April 3, the notice says.
The notice, which will be published in the Federal Register May 20, says the process of submitting documentation described in it does not cover the later adjustment to the Section 232 action, which provides for a customs rebate on some imported parts for cars assembled in the U.S.
Starting May 20, companies may submit the documents described below to Autos232USMCAContent@trade.gov.
The general counsel or chief financial officer will need to send:
- the declared customs value of a vehicle in the model line; an average value may be provided, using the averaging methodology in Article 5 of USMCA's auto appendix.
- USMCA certification declaration, and the steel and aluminum and labor value content certifications, including whether the model is in an alternative staging regime
- for retroactive imports, entry numbers.
The notice says Commerce may ask for more documentation or clarification. Once Commerce makes the determination, it will inform the importer and CBP how much of the vehicle is subject to tariffs.
If a production change results in less U.S. value, the importer must promptly inform Commerce and request a new eligibility determination. If a production change increases U.S. value, the automaker may also request a new determination. Even with no changes, the Commerce eligibility determination only lasts six months, and importers must submit new documentation at least 30 days ahead of the expiration.
The notice says this process is not subject to comment, because it is a matter of foreign affairs, and thereby not under the Administrative Procedure Act.