US Auto Manufacturers to Benefit from Section 232 Auto Parts Tariff Offset

On April 29, 2025, the President issued a proclamation on Amendments to Adjusting Imports of Automobiles and Automobile Parts into the United States. The action reduces Section 232 auto part duties, accounting for 15% of the value of an automobile assembled in the U.S. for 1 year and equivalent to 10% of that value for an additional year. U.S. automobile manufacturers can apply for an offset that can be passed on to their suppliers who import the auto parts into the U.S.

Additional information on the update may be found on a White House Fact Sheet: President Donald J. Trump Incentivizes Domestic Automobile Production.

Eligibility

(a) For automobiles assembled in the U.S., automobile manufacturers shall be eligible to receive an import adjustment offset amount applicable to section 232 duties on automobile parts based on the following schedule:

• (i)   The automobile manufacturer may apply for an import adjustment offset amount equal to 3.75% of the aggregate Manufacturer’s Suggested Retail Price (MSRP) value of all automobiles assembled in the United States from April 3, 2025, through April 30, 2026.
• (ii)  The automobile manufacturer may apply for an import adjustment offset amount equal to 2.5% of the aggregate MSRP value of all automobiles assembled in the United States from May 1, 2026, through April 30, 2027.

Details

(b) The percentage rate provided in subsection (i) reflects the total duty that would be owed when a 25% duty is applied to parts accounting for 15% of an automobile’s MSRP value.  The percentage rate provided in subsection (ii) reflects the total duty that would be owed when a 25% duty is applied to parts accounting for 10% of an automobile’s MSRP value. 

Who can use the offset amount?

(c) Only automobiles that undergo final assembly in the United States are eligible to be included in this calculation.  The manufacturer’s import adjustment offset amount may only be used by importers of record authorized by that manufacturer, and the amount may only be used to offset tariff liability related to that manufacturer’s automobile parts tariff liability under Proclamation 10908.  Should a manufacturer’s import adjustment offset amount exceed the total amount attributable to that manufacturer’s automobile parts tariff liability under Proclamation 10908, the relief is capped at the total amount of that manufacturer’s automobile parts tariff liability under Proclamation 10908, and the manufacturer may not use the additional amount above that cap to offset any other tariff liability.  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.

FAQs

When will manufacturers be able to request an import adjustment?

Within 30 days of the date of this order, the Secretary shall establish a process by which manufacturers seeking an import adjustment offset amount.

What type of information will manufacturers need to provide to the Secretary?

(i)    Documentation certifying the number of automobiles the manufacturer projects it will assemble in the United States, as well as a list of all plant locations where the projected automobiles will undergo final production;
(ii)   Documentation certifying the manufacturer’s projected cost of tariffs due to imported automobile parts subject to Proclamation 10908, broken down by tariff costs the manufacturer will incur directly and tariff costs the manufacturer will incur from its suppliers;
(iii)  Documentation detailing the total import adjustment offset amount requested within the schedule determined by the Secretary in accordance with this proclamation;
(iv)   Documentation identifying the importer(s) of record, including importer of record numbers, eligible to use that manufacturer’s import adjustment offset amount, as well as the amount of the manufacturer’s offset amount allotted to each importer of record; and
(v)    A certification, signed by a senior officer of the manufacturer, attesting under penalty of perjury that the information submitted under subsections (i) through (iv) 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.

How will U.S. Customs know if an importer has an offset?

Upon verification of the completeness and accuracy of a manufacturer’s submission and the manufacturer’s eligibility, the Secretary shall approve the application and notify U.S. Customs and Border Protection (CBP) with the information necessary for CBP to administer and implement the manufacturer’s import adjustment offset amount, including importer of record number(s) for the importer(s) eligible to use each offset amount and the approved import adjustment offset amount.  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.

When will U.S. Customs provide approved importers with an import adjustment offset amount?

As soon as practicable and may request information from importers of record as necessary to implement a particular manufacturer’s import adjustment offset amount. 

What if an importer claims and receives any import adjustment offset amount from CBP in excess of the amount approved by the Secretary?

CBP may assess monetary penalties in the maximum amount permitted by law.

Have Questions? Contact your local NNR Representative.

We will continue to monitor this tariff action and provide updates as they become available.