U.S. Considers Tariff Adjustments on Auto Parts, Steel, and China Imports

The U.S. government will be considering changes to its tariffs on car parts and steel and aluminum, as well as certain levies on imports from China, according to Automotive Dive.

The news came via Federal Reserve notices published last week, which outlined how federal agencies will accept public input and decide which items to add to the list of products currently subject to Section 232 levies on car parts, steel and aluminum. Exclusions to Section 301 tariffs on imports from China will be evaluated separately by the Commerce Department.

Shared in the notices was how the Commerce Department and International Trade Administration will consider expansions to the list of items covered under Section 232 duties on auto parts. A two-week comment period will be opened by ITA on Oct. 2, where domestic carmakers and other interested parties can submit requests to add to the list of goods subject to 25% auto parts tariffs.

It’s possible that items like wire harnesses and upholstery used in car production could be added to items covered by auto part tariffs, but they would not be considered auto parts under traditional Harmonized Tariff Schedule headings, as shared by Alexander Schaefer, a partner in the international trade group at Crowell & Moring.

“The automotive supply chain is complex, and changes in trade rules are likely to introduce new variables, including tariff stacking, compliance under USMCA, and sudden shifts in cost structures,” stated a client alert from law firm Clark Hill. “For manufacturers and suppliers, the risks are immediate and the consequences complex.”

Public input will also be gathered on additional products to include on the list of goods covered by Section 232 steel and aluminum tariffs. Over 400 new products have already been expanded to those covered by the duties, following the inclusion process that launched this past spring.

Additionally, the USTR will be opening the review process for current exclusions to Section 301 tariffs on imports from China. The agency will focus on the availability of goods from non-China sources; development of production in the U.S. or other countries; and whether current tariffs will help move sourcing out of China.