New adjustments to US tariffs

The USA issued provisions offering an import adjustment offset for the automotive sector and avoiding cumulation of certain tariffs.

The Executive Order Addressing Certain Tariffs on Imported Articles – The White House together with a Proclamation Amendments to Adjusting Imports of Automobiles and Automobile Parts Into the United States – The White House establish a tariff “offset” system for U.S. vehicle manufacturers and avoiding cumulation of auto duties with those on steel, aluminium, and Canadian or Mexican goods.

IMPORT ADJUSTMENT OFFSET

The Proclamation states that an “automobile manufacturer may apply for an import adjustment offset amount equal to 3.75 percent of the aggregate [MSRP] value of all automobiles assembled in the United States from April 3, 2025, through April 30, 2026,” and for “2.5 percent of the aggregate MSRP value of all automobiles assembled in the United States from May 1, 2026, through April 30, 2027.” Only automobiles that undergo final assembly in the United States are eligible to be included in this calculation.

PREVENTION OF DUTY CUMULATION

According to our understanding, the Executive Order exempts imported vehicle and auto parts from steel, aluminium, Canada and Mexico tariffs, but also prevents other cumulative interactions between those five different tariffs, even outside the auto sector (with the exception of steel and aluminium applied together, though, as stated in Sec 3.a.iii of the Order). For instance, under the new policy steel beams imported from Mexico only trigger a single 25% tariff rather than a cumulative 50 % rate (25 % for the steel and aluminium duty and another 25% for its origin). 

The exemptions are retroactive to March 4, when the Canada and Mexico tariffs took effect, and importers who paid cumulative tariffs on qualifying goods will be offered refunds. But the exceptions are limited to these cases and don’t comprise for instance the tariffs on Chinese imports.