CBP Releases Section 232 Guidance on Buses, Medium- and Heavy-Duty Trucks and Parts
CBP released guidance on Section 232 import duties for medium- and heavy-duty trucks, medium- and heavy-duty truck parts, and buses via an Oct. 29 cargo systems message.
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Effective Nov. 1, classes III through VIII trucks and their parts will be subject to a 25% duty, while buses will be subject to a 10% duty (see 2510170043). There will be USMCA favorable treatment for eligible imports of affected trucks, meaning that the non-U.S. content will be subject to the 25% tariff, while the U.S. content will not be subject to the duty. But buses may not be available for preferential treatment under USMCA.
New subheading 9903.74.01 will cover imports of medium- and heavy-duty trucks that are subject to the tariffs, with a 25% rate of duty. New subheading 9903.74.02 will apply to buses subject to the tariffs, with a 10% duty.
New subheading 9903.74.03 will eventually be used to report the non-U.S. content of USMCA-qualifying trucks, dutiable at 25%. Subheading 9903.74.06 will be used for the U.S. content, with no additional duties. Both subheadings may only be used upon approval by the Commerce Department, and both are on hold pending further CBP guidance.
Subheading 9903.74.05 will apply to goods filed under subheadings covered by the tariffs, but that aren’t trucks are buses. No additional duty applies.
Subheading 9903.74.07 will include trucks and buses that were manufactured at least 25 years prior to the date of entry. That subheading carries no additional duty.
For parts, subheading 9903.74.08 will be used to apply the additional 25% tariff to truck and bus parts listed as subject to the tariffs. Subheading 9903.74.11 will be used for goods that are listed under those subheadings but aren’t truck or bus parts, and carries no additional duty.
Subheading 9903.74.10 will be used for truck and bus parts that qualify for USMCA, to which no additional duties apply.
Under the Oct. 17 proclamation that set the tariffs, importers that meet certain conditions can choose whether their parts will be subject to auto parts or truck and bus parts tariffs. Choosing the auto parts tariffs allows importers to benefit from the 15% flat Section 232 + MFN rate for the EU and Japan, and the special 10% additional rate for the U.K.
Those conditions include certification “by the importer of record that such parts will be used” for either truck and bus or automobile production or repair activity; that the goods not fall under Chapters 72, 73 or 76; and that they not be listed as ineligible for the provision.
Subheading 9903.74.09 will apply to parts used for truck production or repair, at a 25% tariff. Subheading 9903.94.05 will apply to parts used for automobile production or repair, at a 25% tariff.
For goods from the EU, subheadings 9903.94.44 and 9903.94.45 may be used if the auto tariff option is selected. The former applies a zero rate to goods with an MFN rate at or above 15%, and the latter applies a flat 15% rate, including MFN, to goods with an MFN rate of less than 15%.
Likewise, for goods from Japan, subheadings 9903.94.54 and 9903.94.55 may be used if the auto tariff option is selected. The former applies a zero rate to goods with an MFN rate at or above 15%, and the latter applies a flat 15% rate, including MFN, to goods with an MFN rate of less than 15%.
Subheading 9903.94.33 applies a 10% additional duty for parts from the U.K. that select the auto parts option.
The guidance also includes additional information on drawback, use of foreign-trade zones, special Chapter 98 classification provisions and tariff stacking.
As mentioned in the proclamation, beginning Nov. 1, goods subject to both Section 232 tariffs on truck and bus parts and on auto parts may only claim direct identification manufacturing drawback or substitution manufacturing drawback.
“No other type of drawback may be claimed. This applies to the following [Harmonized Tariff Schedule] HTS headings: 9903.74.08, 9903.74.09, 9903.94.05, 9903.94.07, 9903.94.32, 9903.94.33, 9903.94.43, 9903.94.45, 9903.94.53, and 9903.94.55,” the guidance says.