On April 29, 2025, President Donald J. Trump signed a significant proclamation aimed at modifying the tariffs on imported automobiles and certain automobile parts, emphasizing national security concerns.
This proclamation follows the Secretary of Commerce’s findings from an investigation dating back to February 17, 2019, which assessed the impact of automotive imports on the national security of the United States.
The investigation revealed that the importation of passenger vehicles—including sedans, SUVs, minivans, and light trucks—as well as certain automobile parts, posed a threat to the country’s national security.
In response, President Trump had initially echoed the Secretary’s concerns in May 2019, leading to Directive Proclamation 9888 that sought negotiations with other nations to address these threats.
However, those negotiations did not yield any fruitful agreements, prompting further action.
The proclamation made on March 26, 2025, highlighted continued security risks from these imports, resulting in the imposition of a new tariff structure designed to address and mitigate these threats effectively.
Under the new tariff system established by Proclamation 10908, effective from April 3, 2025, tariffs were instituted on automobile imports while a separate set of tariffs on automobile parts were set to take effect on May 3, 2025.
The primary objective behind these tariffs is to bolster domestic vehicle assembly operations and reduce reliance on foreign manufacturing, thereby strengthening the U.S. defense industrial base.
In an effort to refine and enhance the previously established tariff system, President Trump’s recent proclamation outlines a revised monetary fee structure aimed at further protecting national security.
The new system is designed to link fees on automobile parts to their usage in vehicle assembly within the United States.
Specifically, the modification stipulates that automobile manufacturers shall be eligible for an import adjustment offset amount that applies to section 232 duties on automobile parts.
This offset is quantified as equal to 3.75% of the total Manufacturer’s Suggested Retail Price (MSRP) of all cars assembled in the United States during the period from April 3, 2025, through April 30, 2026.
Furthermore, from May 1, 2026, through April 30, 2027, the offset will equal 2.5% of aggregate MSRP for those assembled automobiles.
This gradual reduction in duties aims to create a conducive environment for manufacturers, encouraging them to expand domestic production capacity and thereby supporting American jobs.
The proclamation highlights a structured approach whereby only automobiles undergoing final assembly in the U.S. can avail themselves of this import adjustment offset.
Manufacturers must apply for this offset by submitting detailed documentation to the Secretary, including projected assembly numbers, estimated tariff costs associated with imported parts, and certifications regarding the accuracy of these submissions.
Once validated by the Secretary, the applications will be conveyed to U.S. Customs and Border Protection (CBP) to facilitate the implementation of the approved offset amounts.
The mechanism also allows manufacturers to designate specific importers of record who can utilize the approved offsets, thereby streamlining the process for affected parties.
In a move to further enforce compliance, CBP is authorized to impose penalties for any excess claims made by importers beyond what has been approved, thus maintaining the integrity of the system.
The Secretary is tasked with ongoing monitoring of imports and will provide updates to the President regarding any situational changes that could impact national security or indicate a need for further tariff actions.
It is also clarified that this proclamation supersedes any previous inconsistencies embedded within earlier proclamations and executive orders concerning tariffs, streamlining the government’s approach moving forward.
This proclamation represents a pivotal step in addressing national security threats through trade policy and signals an ongoing commitment to bolster domestic manufacturing capabilities in the face of growing global competition.
image source from：https://www.whitehouse.gov/presidential-actions/2025/04/amendments-to-adjusting-imports-of-automobiles-and-automobile-parts-into-the-united-states/
