The U.S. Department of Commerce is expected to expand the range of auto parts subject to a 25% tariff.
On June 24 (local time), the International Trade Administration (ITA) under the Department of Commerce announced that it had established a procedure to add new auto parts to those subject to a 25% tariff upon import into the United States, based on Section 232 of the Trade Expansion Act.
Vehicles waiting for transportation at the port of Baltimore, Maryland, USA. Photo by EPA Yonhap News
Starting July 1, U.S. auto parts manufacturers will be able to submit their opinions to the Department of Commerce regarding which parts they want to see subject to tariffs. The Department of Commerce plans to collect industry opinions every January, April, July, and October.
Currently, a 25% tariff has been additionally imposed on auto parts such as engines, transmissions, powertrain components, and electronic parts since May 3.
On March 26, President Donald Trump instructed the Department of Commerce to establish a procedure for adding auto parts to the tariff list when he announced the plan to impose a 25% tariff on automobiles and auto parts.
If a U.S. manufacturer or related association requests that a specific part be subject to tariffs, the Department of Commerce must decide within 60 days whether to impose the tariff.
If the Department of Commerce expands the range of auto parts subject to tariffs, companies that export parts to the United States and companies that assemble vehicles in the U.S. using imported parts will face increased costs. The South Korean auto parts industry is also expected to be affected.
Meanwhile, on June 12, the Department of Commerce, in response to requests from U.S. companies, added home appliances such as refrigerators, dryers, and washing machines to the list of steel derivative products subject to a 50% steel tariff. As a result, companies exporting home appliances to the U.S., such as Samsung Electronics and LG Electronics, have also been affected by the tariffs.
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