Insights

On April 29, the Trump administration published two actions, an Executive Order (EO) and a Proclamation, announcing amendments to the current convoluted tariff situation. The EO describes when and how various tariff actions are applied cumulatively, or “stack,” and the Proclamation amends the tariff regime for automobiles and automobile parts, described (as initially implemented) in our previous trade alert. Together, these measures clarify, adjust, and in some cases reduce, the tariff burdens on the U.S. automotive sector and some other importers.

Executive Order: Addressing Certain Tariffs on Imported Articles

The EO clarifies that tariffs imposed on Mexico and Canada under the International Emergency Economic Powers Act (IEEPA) and on steel, aluminum, automobiles, and automobile parts under Section 232 of the Trade Expansion Act of 1962 (Section 232) are intended to serve distinct policy goals. However, these tariffs should not be cumulatively applied to the same imported article because “the rate of duty resulting from such stacking exceeds what is necessary to achieve the intended policy goals.” The EO further creates a procedure for determining which of the multiple tariffs apply to an imported article if the article is subject to multiple tariffs.

• Articles subject to Section 232 tariffs on automobiles and auto parts will not also be subject to Section 232 tariffs of 25% on steel or aluminum or IEEPA tariffs on Canadian and Mexican goods.
• Articles subject to IEEPA tariffs on Canadian and Mexican goods will not also be subject to Section 232 tariffs on steel and aluminum.
• Articles subject to steel tariffs may still “stack” with aluminum tariffs and vice versa, potentially leading to 50% tariffs on items that qualify for both steel and aluminum tariffs.
• The “reciprocal” tariffs announced on April 2, 2025 are not stackable with any of the above tariffs.
• Importantly, IEEPA tariffs on Chinese goods related to synthetic opioids and Section 301 tariffs remain stackable with other tariffs. Antidumping and countervailing duties are also stackable with all tariffs.

The EO applies retroactively to all entries made on or after March 4, 2025, and importers may request refunds for overpaid duties. The EO clarifies that “refunds will be processed pursuant to applicable laws and U.S. Customs and Border Protection’s (CBP) standard procedures for such refunds.”

Proclamation: Amendments to Adjusting Imports of Automobiles and Automobile Parts

The April 30 Proclamation amends Proclamation 10908, dated March 26, 2025, which imposed a 25% tariff on imports of automobiles and certain auto parts. The amendments include the creation of an “import adjustment offset” for automobile manufacturers as follows:

• For automobiles assembled in the United States, automobile manufacturers shall be eligible to receive an import adjustment offset amount applicable to Section 232 duties on automobile parts based on the following schedule:
  • The automobile manufacturer may apply for an import adjustment offset amount equal to 3.75%[1] of the aggregate Manufacturer’s Suggested Retail Price (MSRP) value of all automobiles assembled in the United States from April 3, 2025, through April 30, 2026.
  • The automobile manufacturer may apply for an import adjustment offset amount equal to 2.5%[2] of the aggregate MSRP value of all automobiles assembled in the United States from May 1, 2026, through April 30, 2027.

The Proclamation explicitly provides that only automobiles that undergo final assembly in the United States are eligible for the import adjustment offset, and the offset may only be claimed by importers of record authorized by the qualifying automobile manufacturers. Relief pursuant to the import adjustment offset is capped at the total amount of a manufacturer’s automobile parts tariff liability under the Section 232 auto parts tariffs.

Within 30 days of the Proclamation, the Secretary of Commerce must establish a process for manufacturers to apply for the import adjustment offset, and such application will require a significant amount of documentation, including:

• Documentation certifying the number of automobiles the manufacturer projects it will assemble in the United States, as well as a list of all plant locations where the projected automobiles will undergo final production;
• Documentation certifying the manufacturer’s projected cost of tariffs due to imported automobile parts subject Section 232 tariffs on auto parts, broken down by tariff costs the manufacturer will incur directly and tariff costs the manufacturer will incur from its suppliers;
• Documentation detailing the total import adjustment offset amount requested within the schedule determined by the Secretary of Commerce;
• Documentation identifying the importer(s) of record, including importer of record numbers, eligible to use that manufacturer’s import adjustment offset amount, as well as the amount of the manufacturer’s offset amount allotted to each importer of record; and
• A certification, signed by a senior officer of the manufacturer, attesting under penalty of perjury that the information submitted in the above described documentation is true, complete, and accurate to the best of the manufacturer’s knowledge, and that the manufacturer has conducted reasonable due diligence to verify the accuracy of the assertions and facts contained in its submissions.

According to the Proclamation, CBP will begin providing the approved importers with an import adjustment offset amount “as soon as practicable.”

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In the coming days and weeks, we expect CBP to provide additional guidance related to the “Stacking” EO, potentially including information to facilitate refunds for affected importers. Additionally, the U.S. Department of Commerce will provide guidance regarding the process for automotive manufacturers to obtain an import adjustment offset. The Torres Trade Law attorneys will continue to monitor the evolving tariff situation. If you have any questions regarding the recent tariff adjustments, tariffs generally, or customs compliance, please do not hesitate to contact Torres Trade Law.