Notice2025-08917
Procedures for Submissions by Importers of Automobiles Qualifying for Preferential Tariff Treatment Under the USMCA To Determine U.S. Content
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Published
May 20, 2025
Issuing agencies
Commerce DepartmentInternational Trade Administration
Abstract
In the Proclamation of March 26, 2025, "Adjusting Imports of Automobiles and Automobile Parts Into the United States," the President imposed additional tariffs on imports of specified automobiles and automobile parts to eliminate the threat to national security posed by such imports. That Proclamation also provided that for automobiles that qualify for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA), importers of such automobiles may submit documentation to the Secretary of Commerce (Secretary) identifying the amount of U.S. content in each model imported into the United States. This notice establishes procedures for submission and review of such documentation by the Department of Commerce (Department).
Full Text
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<title>Federal Register, Volume 90 Issue 96 (Tuesday, May 20, 2025)</title>
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[Federal Register Volume 90, Number 96 (Tuesday, May 20, 2025)]
[Notices]
[Pages 21450-21455]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-08917]
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DEPARTMENT OF COMMERCE
International Trade Administration
[Docket No. 250513-0085]
RIN 0625-AB28
Procedures for Submissions by Importers of Automobiles Qualifying
for Preferential Tariff Treatment Under the USMCA To Determine U.S.
Content
AGENCY: International Trade Administration, Department of Commerce.
ACTION: Procedures for submission of documentation related to
automobile tariffs.
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SUMMARY: In the Proclamation of March 26, 2025, ``Adjusting Imports of
Automobiles and Automobile Parts Into the United States,'' the
President imposed additional tariffs on imports of specified
automobiles and automobile parts to eliminate the threat to national
security posed by such imports. That Proclamation also provided that
for automobiles that qualify for preferential tariff treatment under
the United States-Mexico-Canada Agreement (USMCA), importers of such
automobiles may submit documentation to the Secretary of Commerce
(Secretary) identifying the amount of U.S. content in each model
imported into the United States. This notice establishes procedures for
submission and review of such documentation by the Department of
Commerce (Department).
DATES: Importers may begin submitting documentation as described below
on or after May 20, 2025.
ADDRESSES: Documentation must be submitted electronically via
<a href="/cdn-cgi/l/email-protection#82c3f7f6edf1b0b1b0d7d1cfc1c3c1edecf6e7ecf6c2f6f0e3e6e7ace5edf4"><span class="__cf_email__" data-cfemail="fbba8e8f9488c9c8c9aea8b6b8bab894958f9e958fbb8f899a9f9ed59c948d">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Emily Davis, Director for Public
Affairs, International Trade Administration, U.S. Department of
Commerce, 202-482-3809, <a href="/cdn-cgi/l/email-protection#33765e5a5f4a1d7752455a407347415257561d545c45"><span class="__cf_email__" data-cfemail="2b6e46424752056f4a5d42586b5f594a4f4e054c445d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
On March 26, 2025, the President issued Proclamation 10908,
``Adjusting Imports of Automobiles and Automobile Parts Into the United
States'' (90 FR 14705) (the Proclamation), finding that imports of
automobiles and certain automobile parts continue to threaten to impair
the national security of the United States and determining that it is
necessary and appropriate to impose specified tariffs to adjust imports
of automobiles and certain automobile parts so that such imports will
not threaten to impair national security pursuant to section 232 of the
Trade Expansion Act of 1962, as amended (19 U.S.C. 1862). The
Proclamation imposed a 25 percent tariff on certain imports of
automobiles, effective April 3, 2025, and certain imports of auto
parts, effective May 3, 2025. But the Proclamation also provided that
for automobiles that qualify for preferential tariff treatment under
the USMCA, importers of such automobiles may submit documentation to
the Secretary identifying the amount of U.S. content in each model
imported into the United States. The Proclamation specified that ``U.S.
content'' refers to the value of the automobile attributable to parts
wholly obtained, produced entirely, or substantially transformed in the
United States. Production shall be interpreted as that term is defined
in Article 4.1 of USMCA (available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>), which includes the manufacturing, processing, or
assembling of a good. The Proclamation authorized the Secretary to
approve imports of such automobiles to be eligible to apply the
additional tariff exclusively to the value of the non-U.S. content of
the automobile and provided that the non-U.S. content of the automobile
is to be calculated by subtracting the value of the U.S. content in an
automobile from the total value of the automobile.
II. Eligibility
Only vehicles imported from Mexico and Canada that qualify for
preferential tariff treatment under the USMCA may be found to be
eligible to apply the additional tariff exclusively to the value of the
non-U.S. content of the automobile. Vehicles imported from non-USMCA
countries and vehicles imported from Canada and Mexico that do not
qualify for preferential tariff treatment under the USMCA may not be
found to be eligible.
For the avoidance of doubt, the preferential tariff treatment
available under this notice applies exclusively to automobiles imported
from Canada or Mexico that qualify for preferential treatment under the
USMCA, while the preferential tariff treatment under Proclamation 10925
applies exclusively to automobiles assembled in the United States using
foreign parts.
Proclamation 10908 separately references the Secretary establishing
a process to apply the additional tariff exclusively to the value of
the non-U.S. content of automobile parts. This notice does not
establish that process.
III. Opportunity To Submit Documentation
Importers of automobiles qualifying for preferential treatment
under the USMCA seeking preferential tariff treatment on the U.S.
content of their automobiles may submit documentation, on a model line
basis, identifying the type and value of U.S. content attributable to
each model line imported into the United States.
Each submission should include documentation certified by an
importer's Chief Financial Officer, General Counsel, or an equivalent-
level of senior officer that identifies the following:
1. The total declared customs value of an automobile in the model
line at the time of importation based on 19 U.S.C 1401a. If the customs
value varies within the model line, the importer may provide an average
value consistent with an averaging methodology set forth in Article 5
of the Appendix to Annex 4-B, ``Provisions Related to the Product-
Specific Rules of Origin for Automotive Goods,'' of Chapter 4 of the
USMCA (``Automotive Appendix'') (available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>).
2. Total Value of U.S. content for an automobile in that model line
based on 19 U.S.C. 1401a attributable to parts wholly obtained,
produced entirely, or substantially transformed in the United States
for a vehicle in the model line (``U.S. content''). If the U.S. content
attributable to such parts varies within a model line, the importer may
provide an average value consistent with an averaging methodology set
forth in the USMCA Automotive Appendix Article 5.
3. Total value of non-U.S. content of an automobile in the model
line, calculated by subtracting the value of the U.S. content for an
automobile in the model line from the total value of the automobile. If
the value varies within the model line, the importer may provide an
average consistent with an averaging methodology set forth in the USMCA
Automotive Appendix Article 5.
4. Vehicle production location(s) and country of final assembly.
Vehicle production locations may include more than one country.
5. Certification of eligibility for USMCA preference (i.e., the
signed
[[Page 21451]]
origin certification that supports the import meeting the rules of
origin requirements as well as the approved producer-submitted auto
certifications, jointly reviewed/approved by U.S. Customs and Border
Protection and the Department of Labor, for meeting North American
steel and aluminum content, and North American labor value content
requirements) for the model line as submitted to U.S. Customs and
Border Protection (CBP), including whether the model line is subject to
an approved Alternative Staging Regime outlined in the USMCA Automotive
Appendix Article 8 of Chapter 4 of the USMCA (available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>).
6. The importer name, importer of record number, manufacturer name,
manufacturer facility, country of origin, and year, make, and model
information for every model line requested in the submission. If
retroactive treatment is requested, the importer should provide entry
numbers for previously imported automobiles.
IV. Review Process
The Department will review each submission for completeness and
compliance. The Department may request supplemental documentation or
clarification. Upon verification by the Department that a submission is
consistent with this notice and upon a determination of the value of
the U.S. content and non-U.S. content for the requested model line, the
Department will inform the importer and CBP of that determination and
of the value of the non-U.S. content for each model line. The Commerce
Department will provide CBP with a list of importers and automobiles
authorized by Commerce, including importer name, importer of record
number, manufacturer name, manufacturer facility, country of origin,
and year, make, and model of each authorized automobile.
The additional tariff will apply exclusively to the value of the
non-U.S. content for the relevant model line. The Secretary may
retroactively extend this treatment to qualifying model lines for
vehicles imported on or after April 3, 2025, at his discretion, and
provide CBP with the entry numbers of the previously imported
automobiles subject to any retroactive treatment. If a change in
sourcing or production results in a decrease in U.S. content relevant
to the eligibility determination, the importer must promptly inform the
Department and request a new eligibility determination by providing the
documentation described above. If a change in sourcing or production
results in an increase in U.S. content, the importer may inform the
Department and request a new eligibility determination by providing a
new submission containing the information required by section III.
Regardless, eligibility determinations are only valid for 6 months from
the date of issuance, and importers seeking continued eligibility for a
model line must submit new documentation at least 30 days prior to the
expiration of its previous eligibility determination.
V. Consequences for Misreporting
If CBP determines that the declared U.S. content is overstated or
inconsistent with a U.S. content figure approved by the Secretary, the
25 percent tariff will apply retroactively (from April 3, 2025, to the
date of the inaccurate overstatement) and prospectively (from the date
of the inaccurate overstatement to the date the importer corrects the
overstatement, as verified by CBP) to the full value of all automobiles
of the same model line imported by the same importer, as provided for
in Proclamation 10908. This does not apply to or otherwise affect any
other applicable fees or penalties.
VI. Confidential Business Information
Submissions containing confidential business information must be
clearly marked as such.
VII. No Effect on USMCA Preferential Status
This process does not affect or alter the determination of whether
a vehicle qualifies for USMCA preferential tariff treatment.
VIII. Authority
This notice is issued pursuant to the authority delegated to the
Secretary by Proclamation 10908 consistent with section 232 of the
Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).
IX. Administrative Procedure Act
The provisions of the Administrative Procedure Act (5 U.S.C. 553)
requiring notice of proposed rulemaking, an opportunity for public
comment, and a delay in effective date are inapplicable because this
action involves a military or foreign affairs function of the United
States. (See 5 U.S.C. 553(a)(1)) The President concurred with the
Secretary's finding that automobiles and certain automobile parts are
being imported into the United States in such quantities and under such
circumstances as to threaten to impair the national security of the
United States. So that such imports will not threaten to impair the
national security, the President imposed additional tariffs on
specified imports under section 232 of the Trade Expansion Act of 1962,
as amended (19 U.S.C. 1862) and also authorized the Secretary to
approve certain imports of automobiles to be eligible to apply those
additional tariffs exclusively to the value of the non-U.S. content of
the automobile (Proclamation 10908).
Because a notice of proposed rulemaking and an opportunity for
public comment are not required under the Administrative Procedure Act
or by any other law, the analytical requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., are not applicable.
X. Executive Orders 12866 and 14192
This notice has been determined by OMB to be significant under
Executive Order (E.O.) 12866. This notice is not an E.O. 14192
regulatory action because it is does not impose any more than de
minimis regulatory costs. As required by E.O. 12866, and the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., the Department of Commerce (the
Department) has prepared the following regulatory impact analysis (RIA)
for this notice.
A. Regulatory Impact Analysis
The Office of Management and Budget (OMB) has determined that this
action is significant pursuant to Executive Order (E.O.) 12866. As
required by E.O. 12866, and the Regulatory Flexibility Act, 5 U.S.C.
601, et seq., the Department of Commerce (the Department) has prepared
the following regulatory impact analysis (RIA) for this notice.
1. Need for Regulatory Action
The reasons for this action and an explanation of its necessity are
articulated in the preamble to the notice and are summarized here. On
March 26, 2025, the President issued Proclamation 10908, ``Adjusting
Imports of Automobiles and Automobile Parts Into the United States,''
finding that imports of automobiles and certain automobile parts
continue to threaten to impair the national security of the United
States, and that it is necessary and appropriate to impose specified
tariffs to adjust imports of automobiles and certain automobile parts
so that such imports will not threaten to impair national security
pursuant to section 232 of the Trade Expansion Act of 1962, as amended
(19 U.S.C. 1862).
The Proclamation announced a 25 percent tariff on certain imports
of automobiles and automobile parts, with
[[Page 21452]]
tariffs on automobiles effective April 3, 2025. However, the
Proclamation also provided that for automobiles that qualify for
preferential tariff treatment under the United States-Mexico-Canada
Agreement (USMCA), importers of such automobiles may submit
documentation to the Secretary of Commerce identifying the amount of
U.S. content in each model imported into the United States. This notice
provides the guidance to importers on the procedures for submitting
their request to the Secretary.
2. Description of the Notice
For the purposes of the notice, only automobiles imported from
Mexico and Canada that qualify for preferential treatment under USMCA
may be eligible to apply the additional tariff exclusively to the value
of the non-U.S. content of the automobile. Automobiles imported from
non-USMCA countries and automobiles imported from Canada and Mexico
that do not qualify for preferential treatment under USMCA may not be
found eligible.
The Proclamation specified that ``U.S. content'' refers to the
value of the automobile attributable to parts wholly obtained, produced
entirely, or substantially transformed in the United States. Production
shall be interpreted as the term defined in Article 4.1 of USMCA,\1\
which includes the manufacturing, processing, or assembling of a good.
The Proclamation authorized the Secretary to approve imports of such
automobiles to be eligible to apply the additional tariff exclusively
to the value of the non-U.S. content of the automobile and provided
that the non-U.S. content of the automobile is to be calculated by
subtracting the value of the U.S. content in an automobile from the
total value of the automobile.
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\1\ Available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>.
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Under this notice importers of automobiles qualifying for
preferential treatment under the USMCA seeking preferential tariff
treatment on the U.S. content of their automobiles may submit
documentation, on a model line basis, identifying the type and value of
U.S. content attributable to each model line imported into the United
States. Each submission should include documentation certified by an
importer's Chief Financial Officer, General Counsel, or an equivalent
officer that identifies the following:
1. The total declared customs value of an automobile in the model
line at the time of importation based on 19 U.S.C. 1401a. If the
customs value varies within the model line, the importer may provide an
average value consistent with an averaging methodology set forth in
Article 5 of the Appendix to Annex 4-B, ``Provisions Related to the
Product-Specific Rules of Origin for Automotive Goods'' (``Automotive
Appendix''), of Chapter 4 of the USMCA (available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>);
2. Total Value of U.S. content for an automobile in that model line
based on 19 U.S.C. 1401a attributable to parts wholly obtained,
produced entirely, or substantially transformed in the United States
for a vehicle in the model line (``U.S. content''). If the U.S. content
attributable to such parts varies within a model line, the importer may
provide an average value consistent with an averaging methodology set
forth in the USMCA Automotive Appendix Article 5.
3. Total value of non-U.S. content of an automobile in the model
line, calculated by subtracting the value of the U.S. content for an
automobile in the model line from the total value of the automobile. If
the value varies within the model line, the importer may provide an
average consistent with an averaging methodology set forth in the USMCA
Automotive Appendix Article 5.
4. Vehicle production location(s) and country of final assembly.
Vehicle production locations may include more than one country.
5. Certification of eligibility for USMCA preference (i.e., the
signed origin certification that supports the import meeting the rules
of origin requirements as well as the approved producer-submitted auto
certifications, jointly reviewed/approved by U.S. Customs and Border
Protection and the Department of Labor, for meeting North American
steel and aluminum content, and North American labor value content
requirements) for the model line as submitted to CBP, including whether
the model line is subject to an approved Alternative Staging Regime
outlined in the USMCA Automotive Appendix Article 8 of Chapter 4 of the
USMCA (available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between</a>).
6. The importer name, importer of record number, manufacturer name,
manufacturer facility, country of origin, and year, make, and model
information for every model line requested in the submission. If
retroactive treatment is requested, the importer should provide entry
numbers for previously imported automobiles.
3. Description of Affected Entities
The notice will directly affect automobile importers in the United
States and indirectly affect U.S. automobile suppliers, dealers and
consumers. It is unknown exactly how many entities will seek and be
granted tariff exemptions or the specific amount of the U.S. content
eligible for tariff exemption. However, import data can provide a
reasonable approximation of the total number of importers and vehicles
impacted by this notice.
In 2024, the United States imported approximately 8.1 million
automobiles from the world with import values totaling approximately
$248.8 billion, based on the automobile categories (by Harmonized
Tariff Schedule (HTS) code) described in Annex I to the Proclamation.
Among these automobiles, approximately 3.7 million (or roughly 46%) are
listed in U.S. trade statistics as having been declared as eligible for
USMCA preference upon entry--1.07 million of these USMCA-eligible
automobiles were imported from Canada, and 2.66 million of these
automobiles were imported from Mexico. Theoretically, these counts
represent the upper-bound of automobiles that could be eligible for
tariff exemptions on the U.S. content of these imports, if the importer
chooses to submit their documentation and the Secretary approves.
These USMCA-eligible automobiles were primarily produced by
approximately 13 original equipment manufacturers (OEMs) with
operations in Canada and/or Mexico (including several U.S.-owned
companies). The companies' production in these markets included 54
different vehicle model lines, many of which are likely destined for
export to the United States. We remain uncertain as to how many of
these vehicle manufacturers will seek to apply for tariff exclusions
for their U.S. content for these imported vehicles. Also, there are
several other limitations on available data that will be more fully
explored below.
Although we do not have publicly available data to estimate the
number of importers specifically, we believe that commercially
available data validates this estimated range of all affected entities.
It is anticipated that only OEMs and their affiliated importers will
submit documentation to the Secretary, as they are the only entities
likely to have the detailed information required on the U.S. content by
model line.
[[Page 21453]]
4. Expected Costs and Benefits of the Notice
(a) Costs
i. Key Assumptions and Limitations
The global automotive market and supply chain are remarkably
complex with significant variation in parts sourcing across models,
which is considered proprietary information. The cost approximations
presented in this RIA represent our best estimate given limited
publicly available information.
First, for the purposes of our analysis, we assume that all new
automobiles that are imported into the United States are ultimately
sold in the United States, and that they will be subject to the notice.
This assumption means that we do not attempt to determine if there are
automobiles being imported in the United States that are then
transported for sale in other markets (e.g., to Canada and Mexico).
Second, in using proprietary Customs data on importers, we assume
that many of the identified importers of record of the subject
automobiles are importing used automobiles, and that new automobiles
are predominantly imported by OEMs and their affiliates. This
assumption is reflected in the estimates below where we have limited
the number of likely affected entities.
Third, we assume that only the manufacturers and their affiliated
importers of record will have sufficient information to file a claim
based on the detailed U.S. and non-U.S. content contained in the
automobile required for the submission. We also assume that OEMs will
share their calculated U.S. content figures with their affiliated
importers so that they can apply for the tariff exemptions.
Fourth, we make the assumption that the approximate amount of U.S.
content in each of these automobiles is equal to 40 percent of the
value of the vehicle (the actual percentage of U.S. content may vary
significantly from model to model, but it is impossible to estimate
this precisely without input from the manufacturers). However, based on
the Department's industry expertise regarding the U.S. automotive
sector, including our engagement with entities involved in the
automotive supply chain across the United States, Mexico, and Canada,
the Department believes that this figure is a reasonable approximation
of the percentage of U.S. content in the typical USMCA qualifying
vehicle.
Fifth, we do not estimate the cost associated with the probable
substitution of U.S. parts over time as OEMs may seek to acquire more
U.S. content to offset the cost of the tariff charged on non-U.S.
content in subject imported automobiles. Though the added costs of
identifying and certifying new U.S. suppliers are substantial,
importers may reapply for tariff exclusions on their new U.S. content
in the imported automobiles, and this tariff savings will partially
offset the cost of obtaining new U.S. suppliers.
ii. Costs of Implementing the Notice
We identify that the primary cost to automobile importers expected
to be associated with implementation of the notice are costs related to
notice compliance, which would include (but is not limited to) spending
time and resources reviewing and understanding the notice, conducting
due diligence and supply chain analysis on an entity's U.S.-origin
parts and components, and submitting the documentation to the Secretary
to certify eligibility every 6 months. Otherwise, we anticipate that
this notice will primarily represent savings to importers as they are
permitted to only apply the ad valorem tariff to the non-U.S. content
of imported automobiles. These costs and savings are discussed below.
Increased Costs Related to Notice Compliance
Following the publication of the notice, regulated entities will
need to spend time reading the notice, understanding the compliance
mechanisms, and conducting initial due diligence into their U.S.
content in covered automobile imports. The tariff exemption is
anticipated to apply to the U.S. content portions of imports of
passenger automobiles and light trucks (as defined by the HTS codes in
the Annex I to Proclamation 10908) that qualify for preferential tariff
treatment under the USMCA, for which the importer has submitted
documentation to the Secretary of Commerce. The Secretary may approve
imports of these automobiles to be eligible to apply the ad valorem
tariff of 25 percent (as described in clause (1) of the Proclamation)
exclusively to the value of the non-U.S. content of the automobile.
Based on data from Wards Intelligence, the Department estimates
that there are approximately 13 OEMs producing the subject automobiles
through their operations in Canada and Mexico. The companies'
production in these markets included 54 different vehicle model lines,
many of which are likely destined for export to the United States,
however we anticipate the companies will likely list multiple models in
each submission. Therefore, we consider 13 to be the lower bound of the
number of company submissions.
Based on proprietary Customs data available to the Department we
know there were approximately 200 repeat importers of subject
automobiles in 2024. This number represents the number of importers of
record that were reported as having 2 or more import declarations for
subject automobiles within that year. However, for purposes of this
analysis, the Department has conservatively assumed a maximum of 20
notifications per year. This is based on Customs data documenting the
number of importers of USMCA-compliant automobiles, and the assumption
that many of these importers of record are importing smaller shipments
of used automobiles. While used automobile classifications are within
the scope of the Proclamation, most used automobiles do not meet the
requirements to qualify for USMCA preference, thus they will be
ineligible to apply for tariff consideration on only the non-U.S.
content. The proposed documentation would also require specific
information about the U.S. and non-U.S. content for specific vehicle
model lines. This information will likely only be available to the OEMs
and their affiliated importers of record. Since companies are already
required to track their regional value content for the finished
vehicle, as well as the vehicle's core, principal and complementary
parts to meet the requirements for USMCA preferential treatment, the
information required in the submission should be known and readily
available. The Department estimates that it would take recipients
approximately 20 hours to provide each notification, for a total of 400
hours every six months or 800 hours annually for all prospective
applicants. The Department estimates that this work will be conducted
by individuals earning a weighted average hourly wage of $30.19, which
are adjusted upward by 100% to account for overhead and benefits. This
implies total annual costs of approximately $48,000.
If a change in sourcing or production results in a decrease in U.S.
content relevant to the eligibility determination, the importer must
promptly inform the Department and request a new eligibility
determination. If a change in sourcing or production results in an
increase in U.S. content, the importer may inform the Department and
request a new eligibility determination by providing a new submission
containing the information required.
Every subsequent 6 months after the publication of the notice, the
[[Page 21454]]
Department anticipates that the total burden (in hours) for vehicle
importers to re-conduct due diligence into the U.S. content in their
supply chains and re-submit the documentation will be 20 hours.
Alternatively, where there are no material changes to the covered U.S.
content for a subsequent model year, the importer may submit a
confirmation that the prior submitted information remains accurate.
The Department will review each submission for completeness and
compliance. The Department may request supplemental documentation or
clarification. Upon verification by the Department that a submission is
consistent with this notice and upon a determination of the value of
the U.S. content and non-U.S. content for the requested model line, the
Department will inform the importer and CBP) of that determination and
of the value of the non-U.S. content for each model line. The
additional tariff will apply exclusively to the value of the non-U.S.
content for the relevant model line. The Secretary may retroactively
extend this treatment to qualifying model lines for vehicles imported
on or after April 3, 2025, at his discretion.
Anticipated Administrative (Government) Costs
Once received, submissions will be evaluated by the Department as
to whether the importer meets the permissible criteria. This analysis
will be performed by Department staff, including an anticipated initial
review and, if necessary, consultations with the companies to address
any questions. As the number of submissions that will be received each
year is expected to be small, the staffing requirements for review and
analysis of the submissions are also expected to be small. Assuming
conservatively 40 submissions per year, three senior analysts could
handle submissions with a fraction of their annual time. The total
estimated cost would be approximately $37,000 per year (40 submissions
* 3 staff at an average GS-14 salary ($155/hr) \2\ * 2 hours each to
review for each submission).
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\2\ This value is based on GS 14 step five employees in the
Washington, DC locality area in 2025, and the wage rate is adjusted
upward by 100% to account for overhead and benefits.
---------------------------------------------------------------------------
The Federal Government may also incur costs for monitoring and
enforcement efforts. Because the Proclamation includes provisions to
deter violations, we expect that enforcement actions will rarely be
needed. In those cases where the Federal Government will ultimately
need to take enforcement action, the government will incur additional
costs; however, the extent of those costs is currently unknown.
(b) Benefits
Based on the number of imported vehicles from Canada and Mexico
that were declared as being eligible for USMCA preference upon entry in
2024, the upper bound of eligible vehicles for tariff exemption would
be 3,737,347 vehicles worth approximately $101.75 billion. Using 2024
data as a proxy for 2025, we estimate that the approximate revenue of a
25 percent tariff on this value of trade would total $25.4 billion
annually, if this tariff is applied to the full value of the vehicle.
Generally, USMCA compliant passenger automobiles and light trucks
must meet a minimum regional value content requirement of 75 percent to
be eligible for tariff preference. For the sake of this analysis, we
make the assumption that the approximate amount of U.S. content in each
of these vehicles is equal to 40 percent of the value of the automobile
(the actual percentage of U.S. content may vary significantly from
model to model, but it is impossible to estimate this precisely without
input from the manufacturers). This estimate is based on the
Department's industry expertise regarding the U.S. automotive sector,
including our extensive engagement with entities engaged in the
automotive trade across the United States, Mexico, and Canada, and
represents a reasonable approximation of the U.S. content in the
typical USMCA-qualifying vehicle. Using this 40 percent estimate, if
the importers of all of these eligible automobiles submitted a request
to the Secretary and it was approved, the approximate non-U.S. content
of these imported automobiles that would remain subject to a 25 percent
tariff would total $61.1 billion annually with a tariff cost of
approximately $15.2 billion on this non-U.S. content. This would yield
approximately $10.2 billion in lower tariff cost for the importers of
these automobiles. Note that these effects are considered transfers.
These savings are designed to incentivize producers of USMCA-qualifying
vehicles to produce more of the vehicle in the United States, which
would bolster the domestic manufacturing base and reduce the national
security concerns outlined in Proclamation 10908.
(c) Regulatory Alternatives
There is little flexibility for regulatory alternatives regarding
the provisions implemented by this proposed regulation. The
Proclamation clearly directs the Department to establish a process for
importers of subject USMCA compliant vehicles to submit documentation
to the Secretary to only be charged a tariff on the non-U.S. content in
the vehicle. This notice articulates the information required for
submissions to Department for the Secretary to make a determination on
eligible content.
The information requested as part of this notice asks vehicle
importers to provide supply chain information, and aggregate U.S. and
non-U.S. content figures. Other potential formulations of this notice,
for example, a regime based on importers providing detailed information
on the up to 30,000 parts that make up any one automobile, would
substantially increase the burden of compliance on both importers and
the government employees reviewing the information. The notice strikes
a balance of providing relevant information to the Department to make a
determination with respect to U.S. and non-U.S. content of a USMCA-
qualifying vehicle, while avoiding the collection and review of
excessive documentation.
5. Conclusion
This notice, which implements the procedures for submission by
importers of automobiles qualifying for preferential treatment under
the USMCA to determine U.S. content provisions for recovery and removal
of tariffs paid on imported vehicles is expected to provide substantial
benefit to importers of USMCA compliant vehicles into the United
States, creating a meaningful incentive to manufacture automobiles in
the United States. Total estimated costs are approximately $85,000 and
total transfers to affected importers are approximately $10.2 billion,
as described above. As a result, the overall benefits of this notice
are expected to significantly outweigh any negative impact.
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), and the Office of Management and
Budget (OMB) implementing regulations at 5 CFR 1320.13, ITA is
requesting emergency processing for this information collection. The
justification of this emergency request is due to the Proclamation
10908 of March 26, 2025, ``Adjusting Imports of Automobiles and
Automobile Parts Into the United States,'' where the President imposed
additional tariffs on imports of specified automobiles and automobile
parts to
[[Page 21455]]
eliminate the threat to national security posed by such imports. That
Proclamation provided that for automobiles that qualify for
preferential tariff treatment under the United States-Mexico-Canada
Agreement (USMCA), importers of such automobiles may submit
documentation to the Secretary of Commerce (Secretary) identifying the
amount of U.S. content in each model imported into the United States.
With the publication of the notice, ITA is requesting an emergency
revision of an existing OMB control number 0625-0143, Domestic and
International Client Export Services and Customized Forms Renewal, to
meet the requirements of Proclamation 10908. With this notice, ITA is
establishing a process for importers of automobiles that qualify for
USMCA duty preference to submit documentation supporting a claim that
certain parts of the automobile are U.S. content. In the notice, ITA
estimated the burden to the public for this notification will average
800 hours (20 respondents * 20 hours per response * 2 expected
responses per year), including the time for reviewing instructions,
searching existing data sources, gathering the data needed, and
completing and reviewing the collection of information. The estimated
total annual cost to the Federal Government is $37,000. The public may
access this ITA request, including all supporting materials, at
<a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a> and inserting the OMB control number
or the name of the collection. Please send written comments to Emily
Davis, Director for Public Affairs, 202-482-3809,
<a href="/cdn-cgi/l/email-protection#72371f1b1e0b5c3613041b013206001316175c151d04"><span class="__cf_email__" data-cfemail="2d684044415403694c5b445e6d595f4c4948034a425b">[email protected]</span></a>. A comment to OMB is best assured of having its
full effect if OMB receives it within 60 days of publication of this
notice. All written comments submitted in response to this notice will
be included in the record and will be made available to the public.
Please be advised that the substance of the comments and the identity
of the individuals or entities submitting the comments will be subject
to public disclosure. Written comments will be publicly available on
the internet via <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
We are soliciting comments from the public (as well as affected
agencies) concerning our information collection and recordkeeping
requirements. These comments will help us:
(1) Evaluate whether the information collection is necessary for
the proper performance of our agency's functions, including whether the
information will have practical utility.
(2) Evaluate the accuracy of our estimate of the burden of the
information collection, including the validity of the methodology and
assumptions used.
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the information collection on those who
are to respond (such as through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses).
Estimate of burden: Public reporting burden for this collection of
information is estimated to average 20 hours per response.
Respondents: Private Sector.
Estimated annual number of respondents: 20.
Estimated annual number of responses per respondent: 2.
Estimated annual number of responses: 40.
Estimated total annual burden on respondents: 800.
(Due to averaging, the total annual burden hours may not equal the
product of the annual number of responses multiplied by the reporting
burden per response.)
Copies of this information collection can be obtained from Emily
Davis, Director for Public Affairs, 202-482-3809,
<a href="/cdn-cgi/l/email-protection#8cc9e1e5e0f5a2c8edfae5ffccf8feede8e9a2ebe3fa"><span class="__cf_email__" data-cfemail="82c7efebeefbacc6e3f4ebf1c2f6f0e3e6e7ace5edf4">[email protected]</span></a>.
Notwithstanding any other provision of law, no person is required
to respond to, nor is subject to a penalty for failure to comply with,
a collection of information, subject to the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless
that collection of information displays a currently valid OMB Control
Number.
Trevor Kellogg,
Chief of Staff and Senior Advisor, Office of the Under Secretary,
International Trade Administration, Commerce Department, performing the
non-exclusive functions and duties of the Under Secretary for
International Trade.
[FR Doc. 2025-08917 Filed 5-19-25; 8:45 am]
BILLING CODE 3510-DR-P
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