President Trump imposes 25% tariff on automobile imports beginning April 3

President Donald Trump signed an executive order March 27 imposing a 25% tariff on automobile imports to the U.S., beginning April 3. Currently, the tariff will only apply to automobiles, but a process for including automobile parts is being developed.

Automobiles covered under the United States-Mexico-Canada Agreement qualify for “preferential tariff treatment,” where they can submit documentation detailing the amount of U.S. content in each model imported to the country. U.S. content is defined in the executive order as “the value of automobiles attributable to parts wholly obtained, produced entirely, or substantially transformed in the U.S.”

If importers are approved, the 25% tariff would apply exclusively to the value of the non-U.S. content of the automobile. Non-U.S. content would be determined by subtracting the U.S. content’s value from the automobile’s total value.