The U.S. government has confirmed that auto parts subject to the United States-Mexico-Canada Agreement (USMCA) will not be subject to the 25% parts tariff that will take effect starting May 3.
On May 1 (local time), U.S. Customs and Border Protection (CBP) announced that, under the USMCA, auto parts eligible for special tariff treatment will face a 0% additional tariff starting May 3.
Previously, when the Trump administration announced tariffs on automobiles and auto parts on March 26, it stated that for vehicles receiving preferential tariff rates under the USMCA, the 25% tariff would only be calculated on parts that are not of U.S. origin, after determining the origin of the components.
At the same time, the government said that until a method is established to apply tariffs only to non-U.S. parts, it would not impose the 25% tariff on auto parts (excluding semi-knockdown kits) covered by the USMCA.
This CBP notice provides specific procedures regarding the previous announcement. The Wall Street Journal (WSJ) reported that there had been confusion among companies about how these rules would be implemented, and that the CBP notice confirms that auto parts from Canada and Mexico that comply with the USMCA will not be subject to tariffs.
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