Applications Open for Tariff Offset for Imported Auto Parts
The Commerce Department is accepting applications from automakers with U.S. assembly operations, it announced in a June 13 Federal Register notice.
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Automakers should send documentation to autooffset@trade.gov, including:
- How many passenger vehicles and light trucks it produced in the U.S. since April 3, and how many the company projects it will assemble before May 1, 2026
- Aggregate MSRP value of those vehicles
- An estimated tariff liability for both its own imported parts and the parts imported by its suppliers
- The offset it's requesting and how that figure was calculated
- A list of suppliers that will receive part of that offset. The list must include the importer's Importer of Record number and how much of the offset is allotted to each entity.
The notice doesn't explain how the automaker can assess that liability yet, given that currently, auto parts from Canada and Mexico don't owe duties, but later this month, Commerce is to set out instructions for how importers can back out U.S. content in those imported parts and then pay 25% tariffs on the rest.
For vehicles assembled between April 3, 2025, and April 30, 2026, automakers will be able to avoid tariffs on parts of up to 3.75% of the aggregate MSRP of U.S.-assembled vehicles. If they have less than that amount in tariff costs on imported parts, they cannot apply it to tariffs owed on vehicles the companies assembled outside the U.S. However, the credits can carry forward until they are fully exhausted.
The process will begin again in the spring pf 2026, as the Commerce Department wants the same information for vehicles assembled between May 1, 2026, and April 30, 2027. For that year, the aggregate MSRP cap is 2.5%. Credits not used by April 30, 2027, still can be carried forward, as long as they are linked to production on or before that date.
The list of suppliers who can benefit from the offsets will be updated by Commerce and sent to CBP after the initial round on Dec. 1, on June 1, 2026, and on Dec. 1, 2026.
CBP will grant the offset at entry summary filing, "and may request additional documentation to validate entries," the notice said.
The notice estimated that each company that assembles cars and light trucks in the U.S. will need 40 hours to gather data and complete and review its submission, and that there will be two annual submissions.