Trade and Tariffs Update: May 5, 2025

Recent tariff measures now require supply chains to maintain a higher level of data granularity, including detailed information on inputs and production. Importers must be prepared to document and support value content declarations with a level of specificity that may not have been previously required.

We encourage members to consult with their customs broker or trade counsel for further guidance and to ensure compliance with all applicable tariff programs.

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Department of Commerce Launches 232 Inclusions Process for Steel and Aluminum

On April 30, the Department of Commerce announced an interim final rule for a new tariff inclusions process for Section 232 tariffs on steel and aluminum imports. The new process, administered by the Bureau of Industry and Security (BIS), allows companies to request the inclusion of new derivative articles under Section 232 steel and aluminum tariffs.

BIS will accept industry submissions during two-week windows opening each May, September, and January, with the first window starting May 1, 2025. To be considered valid, requests must include detailed information such as:

• Identification of the applicant;
• HTSUS classification of the article;
• A precise definition of the derivative article;
• An explanation of why the product qualifies as a steel or aluminum derivative;
• Statistics on import volumes and domestic production;
• An assessment of the national security risk or economic harm posed by the article.

The full list of required elements and submission guidelines is outlined in the official Federal Register notice.

BIS will publicly post non-confidential versions of all valid requests for a 14-day public comment window on regulations.gov after the conclusion of the two-week submission window.

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New Tariff Stacking Rules and Updated Tariff Calculator

On April 29, President Trump issued an executive order modifying the application of overlapping tariffs or “tariff stacking."

According to the order, “to avoid the cumulative effect of overlapping tariffs on certain articles, this order sets out the procedure for determining which of multiple tariffs shall apply to an article when the article is subject to more than one of the actions” listed below.

Key Provisions of the Executive Order

1. Automobiles and Auto Parts
   Products that are subject to the Section 232 tariffs on auto parts will no longer stack on:
   • Section 232 Steel and Aluminum tariffs (25%)
   • IEEPA tariffs on Canada and Mexico (25%)


2. IEEPA Tariffs on Canada and Mexico
   Products that are subject to the IEEPA tariffs on Canada and Mexico will no longer stack on:
   • Section 232 Steel and Aluminum tariffs (25%)


3. Section 232 Steel and Aluminum Tariffs
   
   • Items subject to the steel or aluminum tariffs may be subject to both aluminum and steel tariffs if the article satisfies all conditions necessary for application of those additional tariffs.

The order does not affect other tariffs or stacking rules not specifically addressed in the Executive Order. The Section 232 auto parts tariffs continue to be exempt from the reciprocal tariffs (China and all others).

The order is retroactive to imports made on or after March 4, 2025. Importers may apply for refunds for any excess duties paid, due to the overlapping tariffs, through U.S. Customs and Border Protection by filing a Post Summary Correction (PSC).

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Tariff Calculator

The Auto Care Association’s Tariff Calculator, updated with the new tariff stacking order, is available exclusively for Auto Care members to help you identify which recent U.S. tariffs may apply to your products.

Use the Tariff Calculator

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[Seeking Member Feedback] New Section 232 Investigation: Medium- and Heavy-Duty Trucks and Parts

On April 24, 2025, the U.S. Department of Commerce initiated a new national security investigation under Section 232 of the Trade Expansion Act of 1962 into imports of medium-duty trucks, heavy-duty trucks, and related parts and derivative products.

Scope of Investigation:

• Medium-duty trucks: trucks with a gross vehicle weight of more than 10,000 and under 26,001 pounds.
• Heavy-duty trucks: trucks with a gross vehicle weight rating of 26,001 pounds or more.
• Medium- and heavy-duty truck parts: components and systems, including engines and engine parts, transmissions and powertrain parts, and electrical components.

Request for Public Comments:

The Commerce Department is seeking written comments from interested parties on issues including:

• Domestic demand for trucks and parts
• Reliance on foreign supply chains
• Risks from import concentration
• Effects of foreign subsidies and unfair trade practices
• Expansion of U.S. production capacity
• Whether additional measures are necessary to protect national security

A full list of issues under review can be found in the Federal Register notice linked below.

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Colombia Delays Safety Regulations That Could Halt U.S. Auto Exports

The Colombian government has postponed the implementation of new vehicle safety regulations that the U.S. Trade Representative (USTR) warned could halt nearly $700 million in annual U.S. automotive exports. In a letter sent in April, USTR Ambassador Jamieson Greer said the new certification requirements would obstruct trade and depart from Colombia’s longstanding recognition of U.S. safety standards.

The new regulations, which include a plan to require third-party certification for certain auto parts, were set to take effect on May 2. Colombia’s Transportation Ministry issued a resolution on April 30 delaying the new regulations until September and indicated ongoing dialogue with the U.S. government to explore alternatives.

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USTR Releases 2025 Special 301 Report on Global IP Protection

On April 29, the Office of the U.S. Trade Representative (USTR) released its 2025 Special 301 Report, which reviews the adequacy and effectiveness of intellectual property (IP) protection and enforcement among U.S. trading partners. The report identifies 26 countries with IP-related concerns. Countries on the “Priority Watch List” include: Argentina, Chile, China, India, Indonesia, Mexico, Russia and Venezuela.

The report identifies a wide range of concerns, including:

• Weak border and criminal enforcement against counterfeit goods, especially in online environments;
• High levels of online and broadcast piracy, including through illicit streaming devices;
• Inadequate protection and enforcement of trade secrets, particularly in China, Russia, and other countries;
• Policies promoting “indigenous innovation” and forced technology transfer that disadvantage U.S. rights holders;
• Broader systemic issues related to IP enforcement and market access barriers across multiple jurisdictions.

The USTR emphasized that stronger global IP protections are critical to U.S. economic competitiveness and innovation. The report also reaffirmed the administration’s commitment to engaging with foreign governments to improve IP systems.

Read the Full Report

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Reminder: De Minimis Exemption Eliminated for China and Hong Kong

Effective May 2, 2025, the U.S. has ended the de minimis exemption for shipments under $800 from China and Hong Kong. All packages from these regions now require formal customs entry, duties, and detailed documentation.

All shipments, regardless of value, will be subject to the following duties:

Postal Shipments

Effective May 2, for goods sent via international postal shipments, transportation carriers may elect to apply:

• a 120% duty (increase from 34% to 84% to now 120%)
• a flat rate of $100 per item (increase from $25 to $75 to now $100)

Effective June 1, the flat rate per item increases to $200 (increase from $50 to $150 to now $200).

Non-Postal Shipments

Goods shipped through non-postal channels are subject to all applicable duties.

CBP has released a worksheet to help calculate applicable duties and flat-rate alternatives as well as guidance for international mail carriers.

CBP CSMS Message

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Reminder: Section 232 Auto Parts Tariffs Now in Effect

As of May 3, 2025, the 25% Section 232 tariff on auto parts for passenger vehicles and light trucks is in effect. While USMCA-compliant parts are currently exempt, the administration has indicated potential modifications “to apply the tariff exclusively to the value of the non-U.S. content.” We will continue to monitor for updates.

The tariff applies to parts for passenger vehicles and light trucks. The tariff does not apply to parts for medium and heavy-duty trucks. See below for the new Section 232 investigation on medium and heavy-duty trucks and parts.

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