A new trade agreement has established reduced tariff rates on automotive and aerospace products, with changes set to take effect shortly after official publication. Under the agreement, the additional in-quota tariff for imported cars will be adjusted to 7.5%, resulting in a total combined rate of 10% when factoring in existing most-favored nation (MFN) tariffs. This rate applies to annual import volumes within a designated quota limit of 100,000 units and becomes effective seven days after the relevant executive order appears in the Federal Register.
In addition, certain automotive parts—when used in the assembly of domestically manufactured vehicles—will also benefit from the same 10% total tariff rate, provided they meet specific country-of-origin requirements.
The agreement also outlines the removal of reciprocal tariffs and Section 232 steel and aluminum derivative tariffs on aircraft parts, engines, and helicopters used in civil aviation. These changes are contingent on a second notice modifying the Harmonized Tariff Schedule, which is required to be published within seven days of the initial Federal Register entry.
There are no current adjustments to broader steel and aluminum tariffs outside the aerospace sector. However, the order leaves open the possibility of future tariff-rate quota arrangements in those sectors, pending evaluation of how the agreement is implemented and observed.
This move signals an ongoing effort to balance strategic trade relationships while refining tariff structures in key industrial sectors.
