U.S. Customs and Border Protection (CBP) has issued official guidance regarding the application of the 25% Section 232 ad valorem tariff on passenger vehicles and light trucks that qualify for preferential tariff treatment under the USMCA and have been approved by the U.S. Secretary of Commerce. This tariff, imposed via Presidential Proclamation 10908, is to be applied exclusively to the value of non-U.S. content of the vehicle.
Background
- Presidential Proclamation 10908, issued April 3, 2025, authorized the U.S. Secretary of Commerce to approve imports of passenger vehicles and light trucks (qualifying under the USMCA) to apply the 25% ad valorem tariff only to the non-U.S. content of the vehicle.[Federal Register Citation: 90 FR 14705]
- On May 20, 2025, the Commerce Department released the formal “Procedures for Submissions by Importers of Automobiles Qualifying for Preferential Tariff Treatment Under the USMCA To Determine U.S. Content”.[Federal Register Citation: 90 FR 21450]
Entry Filing Instructions
CBP’s guidance provides filing instructions for importers, customs brokers, and filers who have received Commerce Department approval to apply the Section 232 duty only to non-U.S. content. Entries must comply with the HTSUS provisions 9903.94.02 and 9903.94.03, as outlined in 90 FR 14705.
Effective Date: Applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on April 3, 2025.
HTSUS Classifications
HTSUS 9903.94.03
Applies the 25% ad valorem duty to the non-U.S. content of qualifying vehicles.
Eligible vehicles must qualify under the USMCA and have received Secretary of Commerce approval to apply the tariff only to non-U.S. content.
HTSUS 9903.94.02
Applies a 0% additional duty to:
Imports under Chapter 87 HTSUS provisions (as defined in U.S. note 33(b) to Subchapter III to Chapter 99) not involving passenger vehicles or light trucks.
The U.S. content portion of vehicles approved under HTSUS 9903.94.03.
Reporting Requirements – Dual Line Entry
For each qualifying import, the entry summary must be reported in two lines:
Line 1 – Non-U.S. Content
- Quantity: Report the full quantity of the imported goods.
- Value: Report the value of the non-U.S. content as approved by the Commerce Department.
- Duties: Apply the 25% Section 232 duty under HTSUS 9903.94.03.
- Special Program Indicator (SPI): Report “S” for USMCA-qualifying goods.
- HTSUS: Use the same Ch. 1–97 HTSUS number as on line 2.
- Country of Origin: Must match the country of origin declared on line 2.
- Other Duties: Report any applicable antidumping (AD) and countervailing duties (CVD).
Line 2 – U.S. Content
- Quantity: Report 0 for quantity.
- Value: Report the U.S. content value (entered value minus non-U.S. content).
- Duties: Apply 0% duty under HTSUS 9903.94.02.
- Special Program Indicator (SPI): Report “S”.
- HTSUS: Same Ch. 1–97 HTSUS as line 1.
- Country of Origin: Same as line 1.
- Other Duties: Include AD/CVD if applicable.
Key Notes & Reminders:
- Approval from the Secretary of Commerce is mandatory to utilize this filing method.
- Only vehicles receiving this specific approval can report the split entry and partial 25% duty.
- Incorrect filing could lead to ACE rejections or duty overpayment.
- This treatment is not retroactive for entries made prior to April 3, 2025.
Need Assistance?
Buckland will continue monitoring CBP updates related to Section 232 tariffs and USMCA provisions. If you have questions or need help reviewing your entry processes, please contact your Buckland representative.