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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

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Through an executive order and a proclamation, both issued on April 29, 2025, President Donald Trump revised the application of previously announced tariffs, including those impacting automobiles and automobile parts. In his proclamation titled “Amendments to Adjusting Imports of Automobiles and Automobile Parts Into the United States,” President Trump revised the applicability of tariffs addressed in Proclamation 9888 of May 17, 2019, and Proclamation 10908 of March 26, 2025. In his executive order titled “Addressing Certain Tariffs on Imported Articles,” President Trump addressed stacking of various tariffs.

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Amendments to Adjusting Imports of Automobiles and Automobile Parts Into the United States Proclamation

Under this new proclamation, automotive OEMs may claim an offset against tariffs for vehicles that undergo final assembly in the United States. This offset reduces their overall tariff liability for qualifying vehicles: 25% tariffs will not apply to 15% of the value of such vehicles in the first year and 10% in the second year. The offset for the first year is calculated based on 3.75% “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[,]” and then 2.5% of the same value for May 1, 2026, through April 30, 2027. These percentages represent 25% of 15% for year one and 25% of 10% for year two.

Once granted, the offset may be used by the OEM to lower its own tariffs liability where it is the importer of record, or it can designate its qualifying suppliers to receive the benefit. The proclamation allows the OEM to choose which importers of record in its supply chain for these vehicles are “eligible to decrement against that manufacturer’s import adjustment offset amount[.]” Because of this selective application of the offset, not all automotive suppliers will benefit from this proclamation.

As with previous proclamations and executive orders, this proclamation makes clear that claiming and receiving offsets in excess of entitled offsets will be subject to maximum penalties available under applicable law. The proclamation also requires the United States Secretary of Commerce to establish processes to implement these changes, and those processes must include strict requirements regarding filings, including certification by a senior officer of the OEM, provided under penalty of perjury, supporting the OEM’s submission. There will also be filing requirements regarding the OEM’s designation of suppliers that can claim the benefit of its offsets.

Addressing Certain Tariffs on Imported Articles Executive Order

The executive order titled “Addressing Certain Tariffs on Imported Articles,” also issued April 29, 2025, addresses how certain tariffs imposed through previous orders and proclamations interact with each other and stack on top of each other. The executive order applies to tariffs issued in 2018, 2020 and 2025 on imports of steel and aluminum, as well as executive orders and proclamations issued this year since Feb. 1 that provide for new tariffs. This executive order addresses the stacking of tariffs as follows:

Automobile and Automobile Parts Tariffs: Tariffs imposed on products subject to tariffs under the automobile and automobile parts tariffs imposed through Proclamation 10908 issued on March 26, 2025, will not be stacked with tariffs imposed under other orders issued since Feb. 1 or with the steel and aluminum tariffs imposed in the proclamations issued in 2018, 2020 and 2025. Any other tariffs or applicable duties not listed in this executive order will apply cumulatively.

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Various Tariffs Imposed Since Feb. 1, 2025: For tariffs imposed on products based on the various orders since Feb. 1, 2025, including tariffs on products from Mexico and Canada, the tariffs will not be stacked with the steel and aluminum tariffs imposed in the proclamations issued in 2018, 2020 and 2025.

Steel and Aluminum Tariffs: While the executive order provides relief from stacking on these other tariffs, it makes clear that any items subject to the steel tariffs that also qualify for the aluminum tariffs, and vice versa, will be subject to both sets of tariffs.&nbsp;

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The executive order provides for implementation of these stacking rules through issuance of further guidance and changes to the Harmonized Tariff Schedule of the United States as needed.&nbsp;

We expect further guidance in the coming weeks that will make these new tariff measures clearer. We also expect that once OEMs begin to apply for offsets, there may be more visibility as to how automotive suppliers may be able to take advantage of those offsets through their OEM customers. The CBP has put out a chart summarizing the 2025 tariffs <a href="https://admin.wnj.com/wp-content/uploads/2025/05/New_Tariff_Requirements_2025_Factsheet_5.5.25.pdf" target="_blank" rel="noreferrer noopener">here</a>. Warner’s attorneys in the Automotive and Supply Chain Industry Groups are ready to help you navigate these new tariffs.

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Tariff Changes — Automotive Offsets and Tariff Stacking

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Tariff Changes — Automotive Offsets and Tariff Stacking

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