Tariff Stacking Removed: Vehicles and parts hit with the new 25% Section 232 auto tariff will no longer face an additional 25% tariff on steel, aluminum, or certain imports from Canada and Mexico. However, tariffs on Chinese imports (up to 145%) and the standard 2.5% automotive import tariff remain.
Assembly Incentives: Automakers assembling vehicles in the U.S. from April 3, 2025, to April 30, 2026, will get a 3.75% credit (based on vehicle value) for duty-free parts imports (excluding Chinese parts). This drops to 2.5% the following year, then ends.
Canada and Mexico Excluded: Vehicles from Canada and Mexico don’t qualify for the credit, and their goods remain subject to the 25% tariffs unless they comply with the USMCA.
