The Federal Register, equivalent to the Official Gazette in the US, should publish on Thursday, 3, the document signed by President Donald Trump that provides for the imposition of 25% rates on the importation of automotive and automotive parts, under the allegation of risks to national safety. The new rates come into force tomorrow for vehicles and on May 3 for parts.
According to the text, the 25% rate will be applied to vehicles such as sedans, SUVs, pickups and vans, as well as components such as engines, transmissions and electrical systems. Companies that prove the manufacture of certain parts in the US may pay the fare only on the foreign portion of the vehicle. In addition, incorrect statements on “national content” will be subject to retroactive tariffs on the total value of the car, according to the document.
The text also provides for the creation of a mechanism to include new automotive parts in the rate of tariffs. Within 90 days after publication, US Secretary of Commerce, Howard Lutnick, should establish a process to evaluate the inclusion of new components considered a threat to national security. Local manufacturers and sector associations may request the imposition of tariffs, provided that they prove increased imports or negative impacts on the domestic industry the government will have 60 days to analyze each order and, if approved, the 25% rate will be valid immediately after publication at Federal Register.
The document justifies the measure by stating that “cars and automotive parts are being imported in quantities and under circumstances that threaten to impair national security.” The decision aims to strengthen national industry, which faces “vulnerabilities in the supply chain” and “unjust subsidies” of foreign competitors.
The European Union and Japan are cited as targets of previous negotiations that have not resulted in satisfactory agreements. The USMCA (US, Mexico and Canada agreement) provides for some exemptions, but, according to the government, the effects were limited.
*With information from Estadão Content
Posted by Carolina Ferreira
