[Global IDT Insights] US Imposes Tariffs on Imports of Medium and Heavy-Duty Vehicles and Parts

Editorial Team – [2025] 180 taxmann.com 59 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

1. United States imposes tariffs on imports of medium- and heavy-duty vehicles, parts, and buses

The United States has imposed ad valorem duties under Section 232 of the Trade Expansion Act of 1962 on imports of medium- and heavy-duty vehicles (MHDVs), medium- and heavy-duty vehicle parts (MHDVPs), and buses. The measure applies to goods entered for consumption or withdrawn from warehouse for consumption on or after 01-11-2025.

The action covers MHDVs and related components classified under the Harmonized Tariff Schedule of the United States (HTSUS), with certain exemptions for vehicles manufactured at least 25 years prior to importation.

The following measures have been specified:

(a) Tariff rates – A 25% ad valorem duty applies to imports of MHDVs and specified MHDVPs, while buses and other vehicles under HTSUS heading 8702 are subject to a 10% ad valorem duty.

(b) United States-Mexico-Canada Agreement (USMCA) preferential treatment – Importers of MHDVs qualifying under the USMCA may submit documentation identifying U.S. content. The 25% tariff may then apply only to the non-U.S. content value, as determined by the Secretary of Commerce. For MHDVPs qualifying under the USMCA, tariffs will not apply until a process is established to apply the duty solely on the non-U.S. content. Knock-down kits remain fully subject to the additional duty.

(c) Import adjustment offset (2025–2030) – MHDV manufacturers assembling vehicles in the United States may apply for an import adjustment offset equal to 3.75% of the aggregate value of all MHDVs assembled domestically during the specified period. A similar process applies to MHDV engine manufacturers.

(d) Foreign trade zones – Products covered by this proclamation that enter U.S. foreign trade zones after the effective date must be admitted in ‘privileged foreign status’ and will be subject to applicable duties upon entry for consumption.

(e) Administrative Measures – The Secretary of Commerce shall continue to monitor imports of MHDVs, MHDVPs, and buses and inform the President of any circumstances that might indicate the need for further action. U.S. Customs and Border Protection (CBP) will administer tariff application and compliance.

This proclamation establishes a comprehensive tariff framework effective 01-11-2025, governing imports of the specified vehicles, parts, and buses.

Source – Official Proclamation

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