| Key Exemptions and Special Filing Instructions
Importers should note several provisions resulting in a 0% additional ad valorem rate of duty:
- USMCA Qualifying Parts: Parts of MHDVs that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA), excluding MHDV knock-down kits or parts compilations (HTSUS 9903.74.10).
- Age Exemption: MHDVs, buses, and other vehicles manufactured in a year at least 25 years prior to the date of entry (HTSUS 9903.74.07).
- Non-MHDV Use: Articles classifiable under the same provisions as MHDVPs but which are not parts of MHDVs (HTSUS 9903.74.11).
- Non-MHDVs: Certain imported vehicles classifiable in headings 8701, 8704, 8705, 8706, and 8709 that are not MHDVs (HTSUS 9903.74.05).
USMCA Non-U.S. Content (Pending Guidance): The 25% duty rate applies to the non-U.S. content of MHDVs eligible for USMCA special tariff treatment (HTSUS 9903.74.03), upon approval from the Secretary of Commerce. However, importers are explicitly instructed: DO NOT REPORT ANY DUTIES BASED ON NON-U.S. CONTENT UNDER THIS HTSUS CLASSIFICATION UNTIL FURTHER GUIDANCE IS PROVIDED. The U.S. content of such approved MHDVs is subject to a 0% additional duty (HTSUS9903.74.07), but importers must also await further guidance for reporting.
Duties on Parts of Passenger Vehicles and Light Trucks
The guidance also includes instructions for parts of passenger vehicles and light trucks (automobiles) certified by the importer to be used for U.S. production or repair activity (excluding certain HTSUS chapters).
- General Rate: For parts from all countries except the European Union, Japan, and the United Kingdom, the rate is 25% (HTSUS 9903.94.07).
- Special Procedures (Combined Duties): Specific procedures and combined tariff rates apply to parts from the EU, Japan, and the UK:
o EU & Japan: If the Column 1 duty rate is less than 15 percent ad valorem, a 15% combined (Column 1 + Section 232) duty rate applies (HTSUS 9903.94.45 or 9903.94.55). The 15% duty amount must be reported on the Chapter 99 heading, and 0 duty amount is reported on the Chapter 1 to 97 HTSUS classification.
o United Kingdom: A 10% combined (Column 1 + Section 232) duty rate applies (HTSUS 9903.94.33). The 10% duty amount must be reported on heading 9903.94.33, and 0 duty amount is reported on the Chapter 1 to 97 HTSUS classification.
Operational and Trade Program Notes
- Foreign Trade Zones (FTZ): MHDVs, MHDVPs, and buses admitted to an FTZ on or after November 1, 2025, must generally be admitted as “privileged foreign status,” unless they qualify for “domestic status”.
- Drawback Eligibility: Effective for drawback claims filed on or after November 1, 2025, the additional Section 232 duties on MHDVPs and auto parts are eligible for Direct Identification Manufacturing Drawback Claims and Substitution Manufacturing Drawback Claims. No other type of drawback may be claimed.
o All antidumping, countervailing, or other duties and charges applicable to the goods shall continue to be imposed in addition to the new Section 232 duties.
o However, the additional MHDV/MHDVP duties (e.g., 9903.74.01, 9903.74.08) shall not apply alongside certain other Chapter 99 additional duties, including specific reciprocal/IEEPA duties or existing Section 232 duties on products like steel, aluminum, or iron.
- Chapter 98: Goods claimed under a Chapter 98 provision are subject to the terms of that provision and applicable CBP regulations; however, duties under subheading 9802.00.60 shall be assessed based upon the full value of the imported article.
The original update may be found here.
The list of impacted HTS codes may be found here.
JSC will continue to monitor the situation and will provide updates as they are available.
If you have any questions, please contact our Compliance Team or your JSC account supervisor. |
