On April 29, 2025, President Trump issued an Executive Order (“E.O.”) modifying the implementation of several types of tariffs. The order impacts the following five tariff actions:
- Section 232 tariffs on auto and auto parts, per Proclamation 10908 (3/26/2025).
- IEEPA fentanyl-related tariff action on Canada, per E.O. 14193 (2/1/2025), as modified by E.O. 14197 (2/3/2025), E.O. 14226 (3/2/2025), E.O. 14231 (3/6/2025).
- IEEPA fentanyl-related tariff action on Mexico, per E.O. 14194 (2/1/2025), as amended by E.O. 14198 (2/3/2025), E.O. 14227 (3/2/2025), and E.O. 14232 (3/6/2025).
- Section 232 tariffs on aluminum and aluminum derivative products, per Proclamation 9704 (3/8/2018), as amended by Proclamation 9980 (1/24/2020) and Proclamation 10895 (2/10/2025).
- Section 232 tariffs on steel and steel derivative products, per Proclamation 9705 (3/8/2018), as amended by Proclamation 9980 (1/24/2020) and Proclamation 10896 (2/10/2025).
As a result of this E.O., an article covered by more than one of these tariff actions will not face stacked tariffs. For example, an article subject to Section 232 auto tariffs is now not also subject to the IEEPA fentanyl tariff actions on Canada and Mexico, or Section 232 steel and aluminum tariffs. One exception is that if an article is covered by both Section 232 steel and Section 232 aluminum actions (namely, in case of derivative products), both tariffs will continue to apply (namely 25% on the value of steel and aluminum content, respectively). As each of these tariff actions impose a 25% duty rate, the net result is that the 25% tariff will apply only once to the entered value.
This “destacking” order has no impact on other tariffs such as antidumping and countervailing duties or the 20% IEEPA fentanyl-related tariff on China.
Also good news for affected importers: this E.O. applies retroactively to entries made on or after March 4, 2025. Importers who paid stacked tariffs can request duty refunds from CBP.
On the same day, President Trump issued a proclamation easing the Section 232 auto tariffs imposed under Proclamation 10908, providing a duty offset of the tariffs on auto parts for auto makers that assemble cars in the United States. An auto manufacturer can apply for an import adjustment offset amount equal to 3.75% of the aggregate Manufacturer’s Suggested Retail Price (MSRP) value of all automobiles assembled in the United States from April 3, 2025 to April 30, 2026, and 2.5% for the following year, from May 1, 2026 to April 30, 2027. If the total amount of Section 232 tariffs on auto parts attributable to a manufacturer is less, the offset is capped at the lesser amount.
The proclamation directs the Department of Commerce to establish a process for auto manufacturers to obtain approval for the tariff offsets. The documentation requirement outlined in the proclamation suggests that, to obtain approval for the tariff offsets, auto manufacturers will need to provide information on vehicle production sites, projected tariff costs, tariff offset amounts, and relevant importers of record, including the offset amount allotted to each importer. CBP is directed to provide guidance and details on the implementation of this temporary tariff relief.
This duty offset approach helps ease supply chain constraints in the near term and aligns with the administration’s efforts to onshore manufacturing. Other strategic sectors currently subject to Section 232 investigations, such as the pharmaceutical and semiconductor industries, could advocate for a similar approach.
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