US Tariff Regime – Reliefs for Automobile Manufacturers and Prevention of Double Tariffs

On Tuesday, April 29, 2025, the President of the United States signed an Executive Order and a Presidential Proclamation, easing some of the customs tariffs on automobiles imposed at the beginning of April.

The Executive Order

The Executive Order clarifies the new customs regime that applies to products imported into the United States in the event of “double tariffs.” Some of the clarifications are important and relevant to Israeli manufacturers:

• ŸThe 25% tariff on automobiles imported into the United States will continue to apply, but importers that paid the tariff on imported automobiles will not have to pay the additional 25% tariff imposed on metal and aluminum or the tariffs imposed on products manufactured in Canada or Mexico, if applicable.
• ŸProducts imported from Canada and Mexico into the United States that do not fulfill the “rules of origin” requirements of the USMCA (the free trade agreement between the United States, Canada, and Mexico), are subject to tariffs (usually at a rate of 25%) [for elaboration on the “Rules of Origin,” see here].
• ŸProducts imported from Canada and Mexico that are subject to the payment of customs duties, are exempt from the additional duty imposed on imports of metal and aluminum into the United States. On the other hand, metal and aluminum products imported from Canada and Mexico that are exempt from paying customs duties due to the USMCA, are subject to the special customs duty imposed on metal and aluminum.
• ŸThe tariffs on metal and aluminum products will apply cumulatively to products fulfilling the criteria of metal products and of aluminum products (50%).

The Presidential Proclamation

The Presidential Proclamation allows manufacturers who perform the final assemblies of automobiles to receive particular customs relief for two years on automobile parts that are not manufactured in the United States.