Section 232 Automotive Tariffs: Issues for Congress

Updated May 14September 5, 2025 (IN12545)

On March 26,In 2025, President Donald Trump announcedhas imposed 25% tariffs on U.S. imports of automobiles and certain automobile parts under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862, as amended). (19 U.S.C. §1862, as amended). Tariffs went into effect for vehicles on April 3 and auto parts on May 3, with partial exceptions for goods complying with certain rules under the U.S.-Mexico-Canada Agreement (USMCA).

Section 232 authorizes the President to take action if the Secretary of Commerce determines that imports of a good "threaten to impair" U.S. national security. President Trump imposed auto tariffs based on the findings of a 2019 a 2019 Section 232 investigation, which concluded that U.S. auto imports were a threat to U.S. national security.

Congress may consider whether to support, curb, or bolster oversight of Section 232 auto tariffs. Some key issues include positive and negativeIssues include implications of auto tariffs for the U.S. economy, relationships with key trade partners, and congressional authorities over trade policy.

Background

In 2024, the United States imported 8.1 million vehicles ($248.8 billion), primarily from Mexico, the European Union249.1 billion). Five partners—Mexico, the European Union (EU), Japan, South Korea, and Canada (see Figure 1). In 2024, these five partners —collectively provided 94% of 2024 U.S. vehicle imports by value and 96% by quantity (see Figure 1). As of 2024. As of 2023, foreign automakers have invested $109124 billion in U.S. operations, and in 2023,2024 produced 4.9 million vehicles (out of 10.32 million total)vehicles in the United States.

Figure 1. U.S. Vehicle Imports by Value and Quantity, 2019-2024

Source: CRS, based on U.S. Census Bureau data, as presented by Trade Data Monitor, accessed April 2025. Harmonized Tariff Schedule (HTS) vehicle codes from Proclamation 10908 of March 26,July 2025.

For most vehicles not traded under a comprehensive U.S. free trade agreement (FTA), which sets terms for reduced tariffs or duty-free tradeor zero tariffs among agreement parties, the United States has imposed a most-favored-nation (MFN) tariff of 2.5% on passenger vehicles and 25% on light trucks. The United States traded largely duty-free with Canada and Mexico under USMCAthe North American Free Trade Agreement (NAFTA) and its successor, the U.S.-Mexico-Canada Agreement (USMCA), and South Korea under the United States-Korea Free Trade Agreement (KORUS). Under KORUS, the U.S. light truck tariff is to be eliminated in 2041. The United States does not have a comprehensive FTAan FTA covering autos with Japan or the EU. Japan eliminated import tariffs on vehiclesvehicle imports in 1978. The EU imposes a 10% MFN tariff on passenger vehicles and 22% on certain light trucks.

2025 Presidential Actions

In his first term2019, President Trump did not implement auto tariffs, but directedresponded to a Commerce Department Section 232 investigation that found imports of automobiles and auto parts threatened national security by directing the Office of the U.S. Trade Representative (USTR) to pursue negotiations with trading partners, including Japan and the EUto address those concerns. In March 2025, President Trump statedproclaimed that USTR's negotiations "did not lead to any agreements of the type contemplated by [S]ection 232." He stated that ," national security concerns "remain and have escalated" since the 2019 investigation, noting that "only about half" of vehicles sold in the United States are manufactured domestically,," and the U.S. share of global automobile production has "remained stagnant." He asserted that USMCA and revisions to KORUS "have not yielded sufficient positive outcomes," and "investments resulting from other efforts, such as legislation," have alsoalso have not been effective.

In March 2025, President Trump issued a proclamation mandating: (1) President Trump imposed 25% tariffs on: (1) all vehicle imports, effective April 3, with exemptions for the U.S. content of USMCA-compliant vehiclesvehicles; and (2) 25% tariffs on certain automobile parts, effective May 3, with exemptions for USMCA-compliant auto parts until the Administration "establishes a process to apply the tariff exclusively to the value of the non-U.S. content" of such parts.

On April 29, President Trump issued guidance to prevent certain goods from being subject to multiple tariff actions. . The following tariffs do not apply to goods subject to Section 232 automotive tariffs:

• • Other Section 232 tariffs (steel, aluminum, copper); and
  • Most country-specific tariffs under the International Emergency Economic Powers Act (IEEPA).

  Unless otherwise agreed, Section 232 automotive tariffs are in addition to:

• MFN tariffs;
Section 232 steel and aluminum tariffs;
• Tariffs on Canada and Mexico under the International Emergency Economic Powers Act (IEEPA); and
• Universal 10% IEEPA tariffs and higher country-specific tariffs (suspended until July)—exemption announced April 2.

Section 232 automotive tariffs are to be added to:

• MFN tariffs;
• 20% IEEPA tariffs on China;
• Antidumping and countervailing duties; and
• Tariffs under Section 301 of the Trade Act of 1974.

PresidentThe Trump also announcedAdministration has implemented a two-year "import adjustment offset" applicable to Section 232 duties on auto parts. President Trump asserted that this would "more effectively eliminate" the threat to U.S. national securityfor auto parts duties. An auto manufacturer may apply for an offset equal to 3.75% of the aggregate Manufacturer's Suggested Retail Price (MSRP) value of all its vehicles assembled in the United StatesU.S.-built vehicles from April 3, 2025, to April 30, 2026. The following year, the offset is to decrease to 2.5%. The Commerce Secretary is to issue regulations and procedures related to the offset's implementation.

2.5%. The United States has been negotiating auto tariffs as part of broader trade talks with partners. Under a U.S. deal with the United Kingdom (UK), most UK auto imports now face a 10% total U.S. tariff rate. The United States and the EU announced that most EU auto imports would face a 15% total tariff, conditioned on the EU implementing certain commitments. The EU has proposed to eliminate tariffs on U.S. industrial products, including vehicles. The United States is to implement a 15% total tariff for most Japanese auto imports and reportedly has agreed to lower auto tariffs to 15% for imports from South Korea. Views on the auto tariffs and subsequent deals are mixed. The White House argues that tariffs could reduce auto imports and strengthen the U.S. industrial base. Some groups, such asincluding labor unions, support the auto tariffs. Auto industry groups and have cautioned that tariffs could negatively affect the U.S. economy, and they have supported the abovementioned efforts to mitigate the effects of tariffs on the auto industry. Such groups have also warned about potential retaliation from trading partners. For example, Canada has retaliated and disputed the tariffs at the World Trade Organization.

Issues for Congress

Congresscriticized deals that would lower tariffs. U.S. automakers have argued that the United States should focus on lowering tariffs on imports from Canada and Mexico, whose automotive products they assert contain high U.S. content. Other auto groups have argued that 15% auto tariffs could still have negative effects, and some have called for negotiations to reduce tariffs further. Some automakers have announced plans to increase U.S. vehicle production.

Issues for Congress

Congress has constitutional authority over foreign commerce and impose tariffs and is deliberating whether to support, curb, or bolster oversight of Section 232 auto tariffs. and related trade negotiations with partners. Some Members assert that tariffs could increase revenues and bolster U.S. manufacturing investment, with some advocating for expanding presidential trade authorities (e.g., H.R. 735). Others call for limiting presidential tariff authorities (e.g., S. 1272/H.R. 2665, H.R. 1903), asserting that Congress should play a stronger role in setting and approving U.S. trade policy.

Some Members have called for exemptions for certain products or countriesexpressed interest in increasing oversight of auto tariffs. Some Members have called for tariff exemptions, like those previously in place for other tariff actionssteel and aluminum tariffs, to mitigate potential impacts on the U.S. economy. President Trump has argued that exemptions may "undermine" the objectives of tariffs.

Others favoring oversight callOther Members have been critical of tariff reductions for the EU, Japan, and South Korea, which they assert could benefit foreign automakers over U.S. automakers. Other Members have called for commissioning a report on the potential economic benefits and costs of tariffs, including onin the auto sector (e.g., S. 959, H.R. 2287). Other oversight proposals include urging Congress to require a new/updated Section 232 investigation into auto imports.