On June 24, 2025, in a press release, the Department of Commerce’s International Trade Administration (ITA) announced new procedures for U.S. producers of auto parts to request that additional auto parts be included in the list of auto parts that are subject to 25% tariffs under the Section 232 review of automobiles and auto parts. These procedures are established pursuant to President Trump’s Proclamation issued on March 26, 2025. For additional background, see Thompson Hine Update of March 27, 2025 and Update of April 30, 2025.

ITA is establishing four two-week submission windows per year in January, April, July, and October respectively. The first ever window is scheduled to open on July 1, 2025. During each window, the ITA will review requests on a rolling basis. After the closing of each window, a non-confidential version of each valid request will be posted and open to public comment for fourteen days. The ITA will make a determination within sixty days of receiving the request.

Each request must include (1) the requester’s identification, (2) a description of the item, (3) the eight or ten-digit classification number from the Harmonized Tariff Schedule of the United States (HTSUS) requested for tariff inclusion, (4) an explanation of why the item is an auto part, (5) information on the domestic industry affected by imports of the item, (6) statistics on imports and domestic production of the item, and (7) a description of how and to what extent imports of the item have increased in a manner that threatens to impair national security or undermine the objectives of the automobile tariffs under Section 232.

In addition to this request mechanism, the Secretary of Commerce can also add more auto parts to the tariff list without requests from producers, according to the March 26, 2025 Proclamation. Parties interested in pursuing tariffs on imported auto parts may consider submission of a request. However, parties wishing to exclude tariffs on imported auto parts may plan to monitor the requests during every quarterly period and consider submission of public comment opposing the requested tariffs.

The U.S. Department of Commerce’s International Trade Administration (ITA) has published a Federal Register notice indicating that effective June 30, 2025, in consultation with U.S. Customs and Border Protection and the U.S. International Trade Commission, it has revised relevant provisions of the Harmonized Tariff Schedule of the United State (HTSUS) to conform with changes specified in an Executive Order by President Donald Trump regarding implementation of the June 16, 2025 General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal (the “General Terms”). The General Terms reached with the United Kingdom concern tariffs on imports of (i) automobiles and automobile parts; (ii) civil aircraft; and (iii) future relief on imports of aluminum and steel articles and their derivatives. See Thompson Hine update of June 18, 2025.

The General Terms provide, inter alia, that the United States intends to create an annual quota of 100,000 vehicles for imports of U.K. automobiles that are classified in heading 8703 of the HTSUS at a combined 10% tariff rate. Effective June 30, 2025, the covered subheadings as set forth in Annex I, Section A of the Federal Register notice, are: 8703.22.01; 8703.23.01; 8703.24.01; 8703.31.01; 8703.32.01; 8703.33.01; 8703.40.00; 8703.50.00; 8703.60.00; 8703.70.00; 8703.80.00; and 8703.90.01. Also effective June 30 is modified duty treatment for certain parts of passenger vehicles and light trucks that are products of the United Kingdom. Annex I, Section B lists numerous covered HTSUS subheadings under Chapters 40, 70, 73, 83, 84, 85, 87, 90, and 94. Annex I, Sections A and B provide additional details on the implementation and scope of the modified customs duty treatment for covered automobiles and automobile parts and should be closely reviewed.

The General Terms also provide that products of the United Kingdom that fall under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft are no longer subject to tariffs previously imposed. Effective June 30, 2025, numerous articles of civil aircraft (all aircraft other than military aircraft), their engines, parts, and components, other related parts, components, and subassemblies, and ground flight simulators and their parts and components that are products of the United Kingdom will no longer be subject to additional duties that resulted from the long-running WTO dispute between the United States and European Union on subsidies provided for large civil aircraft manufacturers. Annex I, Section 3 of the Federal Register notice sets forth numerous HTSUS subheadings that are covered by this modified customs duty treatment.

While the United States and the United Kingdom committed under the General Terms to adopt a structured, negotiated approach to addressing U.S. national security concerns regarding imports of aluminum and steel articles and their derivatives subject to tariffs under Section 232 of the Trade Expansion Act of 1962, this topic is not addressed in the June 30, 2025 Federal Register notice.

The Ninth Circuit Court of Appeals has upheld a $26 million fraud verdict against a pipe importer for violating the False Claims Act (FCA) by making false statements on customs forms to avoid paying antidumping duties on Chinese-made pipe fittings. The court rejected the importer’s argument that the Tariff Act provides the exclusive remedy for customs fraud, affirming that the FCA can also be used to pursue such claims.

The case originated from a whistleblower lawsuit filed by a competitor. The complaint alleged that the importer at issue and its partners misclassified and misrepresented the products imported from China, declaring to customs that they are steel couplings, and later marketing them to its customers as welded outlets, in order to evade a 182.9% antidumping duty, depriving the U.S. government of significant revenue. In response, the importer contended that (1) its products were not subject to the tariffs and (2) that, regardless, the Tariff Act, not the FCA, should govern such disputes. However, the court found that Congress intended both statutes to coexist and that the FCA’s broad scope covers customs duty evasion.

Under Section 1592 of the Tariff Act, the United States can pursue enforcement actions to recover unpaid customs duties and/or impose civil penalties for customs violations by fraud, gross negligence, or negligence. A customs violation by fraud is punishable by a civil penalty in an amount not to exceed the domestic value of the merchandise. The FCA, on the other hand, allows for civil penalties, including three times of the amount of suffered damages (the underpaid duties, in the case of customs violations). The whistleblowers who bring a qui tam action under the FCA can be awarded between 15%-25% of the total recovered amount.

The 9th Circuit’s decision confirms that Section 1592 of the Tariff Act does not displace the FCA, and both statutes may operate in parallel to address customs duty evasions. The original jury verdict at issue found that the importer was liable for violating the FCA and that it owed $8 million in damages, which was tripled under the FCA, plus civil penalties, resulting in the $26 million judgment.

On June 18, 2025, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Russia-related General License (GL) 55D, “Authorizing Certain Services Related to Sakhalin-2.” This general license authorizes certain services that would otherwise be prohibited under OFAC’s Russia sanctions program related to Sakhalin-2 involving the maritime transport of crude oil originating from this oil and gas development on Sakhalin Island, Russia. Originally issued in November 2022, the general license authorized: (i) maritime transport of such crude oil originating from the Sakhalin-2 project, provided that the Sakalin-2 byproduct is solely for importation into Japan; and (ii) certain transactions involving Gazprombank Joint Stock Company (Gazprombank) that are related to the Sakhalin-2 project. 

Revised GL 55D extends such authorizations until December 19, 2025. Certain transactions under each of the general license remain unauthorized and therefore requires close analysis. 

On June 16, 2025, the United States and the United Kingdom formally implemented the General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal (the “General Terms”). In a related Executive Order (EO), President Donald Trump set forth agreements reached with the UK regarding tariffs on imports of (i) automobiles and automobile parts; (ii) civil aircraft; and (iii) future relief on imports of aluminum and steel articles and their derivatives.

Automobiles and Automobile Parts. The EO establishes an annual tariff-rate quota of 100,000 automobiles as classified in heading 8703 of the Harmonized Tariff Schedule of the United States (HTSUS) for automobiles that are products of the United Kingdom. Imports of automobiles within the tariff-rate quota that would otherwise be subject to a 25 percent tariff will now be subject to a 7.5 percent tariff, in addition to the most-favored-nation rate for automobiles of 2.5 percent, for a combined tariff of 10 percent. Automotive parts specified in the relevant section of Chapter 99 of the HTSUS that would otherwise be subject to a 25 percent tariff will instead be subject to a total tariff of 10 percent (including any most-favored-nation tariffs), provided that they are products of the United Kingdom and are for use in automobiles that are products of the United Kingdom. 

Aerospace. For products of the United Kingdom that fall under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft, the U.S. tariffs previously imposed will no longer apply. An October 2019 ruling by a WTO arbitrator allowed the United States to take “countermeasures” and implement retaliatory tariffs due to European Union (EU) subsidies provided for large civil aircraft manufacturers. That ruling determined that the United States could take countermeasures at a level not to exceed $7.49 billion annually. For additional background on this dispute and the resulting retaliatory tariffs, see Thompson Hine Updates of October 4, 2019, December 9, 2019, February 17, 2020, August 13, 2020, October 15, 2020 and November 11, 2020. Overall, under the General Terms, both parties “committed to strengthen aerospace and aircraft manufacturing supply chains by establishing tariff-free bilateral trade in certain aerospace products.”

Aluminum and Steel Articles and Their Derivative Articles. In the General Terms, the United Kingdom has committed to working to meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities. The EO states that at a future time deemed appropriate, the United States will establish a tariff-rate quota for aluminum articles and derivative aluminum articles that are products of the United Kingdom. Imports of aluminum articles or derivative aluminum articles that are products of the United Kingdom in excess of the established tariff-rate quota would remain subject to the Section 232 national security duties of 25 percent.

For additional background on the overall U.S.-UK General Terms, see Thompson Hine Update of May 9, 2025.

On June 12, the Office of the U.S. Trade Representative (USTR) proposed two modifications to its April 17 announcement of actions under Section 301, which are scheduled to take effect starting on October 14, 2025. The actions aim to counter China’s dominance in the maritime sector.

The first proposed modification would revise the method for calculating service fees on Chinese-owned, operated, or built vessels. The second would eliminate the USTR’s authority to suspend export licenses and expand data reporting requirements to include vessel owners and operators.

The USTR is seeking public comment on both proposed modifications.

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On June 10, 2025, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a stay keeping both tranches of President Donald Trump’s tariffs implemented under the International Emergency Economic Powers Act of 1977 (IEEPA) (50 U.S.C. § 1701 et seq.) in effect until final adjudication by the appellate court. The per curiam (i.e., unanimous) order extends the temporary stay previously issued by the CAFC on May 29, 2025, after a decision from the U.S. Court of International Trade (CIT) published the day before held that President Trump’s invocation of the IEEPA was unconstitutional and vacated the two tranches. See Update of May 29, 2025. President Trump had invoked the IEEPA to impose so-called “reciprocal” tariffs against nearly every country in the world (see Update of April 10, 2025), and specific tariffs against Canada and Mexico (see Update of March 6, 2025) and China (see Update of May 12, 2025).

In granting the U.S. government’s motion for the stay, the CAFC acknowledged that “[b]oth sides have made substantial arguments on the merits,” but “[h]aving considered the traditional stay factors…the court concludes a stay is warranted under the circumstances.” The U.S. government’s motion follows its appeal of the CIT decision, which sided with a consolidated group of plaintiffs consisting of 5 small businesses and 12 U.S. states.

Next Steps

The CAFC noted in the order that these issues were “of exceptional importance warranting expedited en banc consideration of the merits in the first instance.” As a result, all 12 CAFC judges will hear the case instead of the standard three-judge panel that presides over such appeals.

Oral argument is scheduled for July 31, 2025. A final decision from the CAFC is not expected until August at the earliest, just three weeks after the 90-day pause of President Trump’s reciprocal tariffs is currently set to expire on July 9, 2025.

President Donald Trump issued a Proclamation on June 3, 2025 increasing the previously imposed Section 232 tariffs on aluminum and steel products and their derivatives from 25% to 50%. These increased tariffs were effective June 4, 2025. The proclamation excluded products of the United Kingdom which stay at 25% until July 9, 2025.

U.S. Customs and Border Protection (CBP) issued guidance via its Cargo Systems Messaging Service (CSMS) in CSMS # 65236374 , CSMS # 65236645 and CSMS # 65236574. The Proclamation and CBP guidance make several important changes to the calculation of the tariffs and stacking of the various Section 232 and International Economic Emergency Powers Act (IEEPA) tariffs, including the use of the United States-Mexico-Canada Agreement preferences.

Tariffs on Aluminum, Steel & Derivatives

Tariffs imposed under Section 232 on aluminum, steel and their derivatives are modified to increase the respective tariff rates from an additional 25% ad valorem to an additional 50% ad valorem for products of countries other than those from the United Kingdom. An exception for Russia continues – aluminum from Russia, or products containing Russian aluminum, remain subject to a 200% tariff on the entire value.

Aluminum and Steel Content in Articles

A key change is that the 50% tariff now applies only to the value of the aluminum/steel content in all imported articles in Chapter 73 and 76 and not the entire value of the product. Previously, the value of aluminum/steel items was only separated for derivative articles outside of Chapter 73 and 76. The non-aluminum/steel portion of these articles will be subject to other applicable tariffs, such as the IEEPA reciprocal tariffs (e.g., 10%).

If the value of the steel/aluminum content is (1) the same as the entered value or (2) is unknown, the duty must be reported under the Chapter 99 classification based on the entire entered value and reported on only one entry summary line.

Where the value of the steel/aluminum content is less than the entered value of the imported article, the good must be reported on two lines. The first line will represent the non-steel content while the second line will represent the steel content. Each line should be reported in accordance with the instructions in CSMS # 65236645 and CSMS # 65236574.

Importers must report the country of melt and pour for steel, and the country of smelt and cast for aluminum, using ISO codes. Supporting documentation must be maintained. Importers must use the correct Chapter 99 HTS codes for each tariff action. CBP will strictly enforce compliance with fines and loss of import rights for violators.

Foreign-Trade Zones and Drawback

Any aluminum or steel article, or their derivatives, admitted into a U.S. foreign-trade zone (FTZ) on or after June 4, 2025, must be admitted under “privileged foreign status” and will be subject to the new tariff rates upon entry for consumption.

Any derivative steel articles previously admitted to a U.S. FTZ under “privileged foreign status,” will nevertheless be subject to the tariff rate in effect on the date of entry for consumption. For example, items of steel entered into an FTZ under privileged foreign status on June 1 when a 25% rate was in effect but later entered into the U.S. for consumption while the 50% rate is in effect, would pay the 50% rate.

No drawback is available for the duties imposed.

New Order for Stacking Tariffs

The updated guidance changes the order for calculating the stacking of tariffs. (See Thompson Hine Update of April 30, 2025 for prior guidance on stacking). The new priority order moves the Section 232 aluminum and steel tariffs above the IEEPA tariffs on Canada and Mexico relating to the border and fentanyl. The new order for stacking tariffs is:

  1. Section 232 Auto/Auto Parts – Proclamation 10908 of March 26, 2025 (Adjusting Imports of Automobiles and Automobile Parts into the United States), as amended;
  2. Section 232 Aluminum – Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum into the United States), as amended;
  3. Section 232 Steel – Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel into the United States), as amended;
  4. IEEPA Canada – Executive Order 14193 of February 1, 2025 (Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border), as amended;
  5. IEEPA Mexico – Executive Order 14194 of February 1, 2025 (Imposing Duties to Address the Situation at Our Southern Border), as amended.

How to Stack Tariffs in Practice

  • Determine if the product is subject to the Section 232 auto/auto parts tariff. If so, stop—no further Section 232 or IEEPA tariffs apply.
  • Check for Section 232 aluminum and/or steel tariffs. If applicable, apply the 50% (or 25% for UK) rate to the value of the aluminum and/or steel content. The non-aluminum/steel portion is subject to IEEPA reciprocal tariffs and other tariffs.
  • If the product is not subject to any of the previously-mentioned tariffs, apply the IEEPA fentanyl (Canada/Mexico) tariffs as appropriate.
  • Apply other applicable duties (e.g., IEEPA fentanyl tariffs on China, antidumping, countervailing, Section 301, Most-Favored Nation (MFN) tariffs) in addition to the previously mentioned tariffs, as these are not affected by the stacking order.

The modified tariff stacking order applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after June 4, 2025.

USMCA Exemption

The updated guidance advises that “subject to” means that duty more than 0% is owed under the tariff action. The updated guidance expressly provides:

  • “Parts of passenger vehicles and light trucks that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA), ARE NOT subject to the 232 Auto/Auto Parts, the IEEPA Canada, or the IEEPA Mexico tariffs.” and
  • “Articles that qualify for preferential tariff treatment under USMCA, ARE NOT subject to the IEEPA Canada or IEEPA Mexico tariffs.”

Previously, aluminum, steel and their derivative products that were subject to the IEEPA tariffs on Canada and Mexico but met USMCA certification requirements typically paid 0% duties (as the IEEPA tariffs on Canada and Mexico were before aluminum/steel in the priority order). The updated guidance now requires the importer of record (IOR) to enter the Section 232 aluminum, steel and derivative products first (after analyzing whether Section 232 auto and auto parts tariffs apply). Of potential greater impact, since the “USMCA exemption” for auto parts and IEEPA Canada/Mexico tariffs means qualifying articles do not pay any duty under those tariffs, USMCA-qualifying items will no longer be considered “subject to” those tariffs. An item that is USMCA-qualified and exempt from the Section 232 auto tariffs may pay Section 232 aluminum/steel tariffs.

All companies should review current practices regarding stacking and use of the USMCA exemption to determine the applicable tariffs. The updated guidance imposes these requirements as of June 4, 2025, and indicates that the revised stacking procedures are not retroactive.

Key Notes:

  • On May 28, the U.S. Court of International Trade (CIT) permanently enjoined tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA), finding that he exceeded statutory and constitutional authority by imposing broad tariffs on imports from China, Canada, Mexico, and other countries.
  • The CIT held that IEEPA does not grant the president unlimited tariff authority, emphasizing that “the Constitution assigns Congress the exclusive powers to ‘lay and collect Taxes, Duties, Imposts and Excises,’ and to ‘regulate Commerce with foreign Nations’” and that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”
  • The CIT found the so-called “Trafficking Tariffs” unlawful because they did not “deal with” the specific threats identified in the Executive Orders (EOs) but instead sought to create leverage over foreign governments – a purpose not authorized by IEEPA.
  • The CIT found that the so-called “Worldwide and Retaliatory Tariffs” fail because they exceed any authority granted to the president by IEEPA to regulate importation through tariffs. 
  • The U.S. government appealed the decision, and the U.S. Court of Appeals for the Federal Circuit (CAFC) temporarily stayed the CIT’s ruling on May 29, allowing the tariffs to remain in effect while the appeal is considered.
  • The CIT’s decision does not impact existing Section 301 tariffs on China or Section 232 tariffs on steel, aluminum, autos, and related products; these remain in full effect.
  • Until further notice, importers should continue to pay all applicable tariffs, maintain detailed records, and monitor for further developments, as the legal status of the IEEPA-based tariffs remains subject to ongoing appellate review.

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On May 29, 2025, the U.S. District Court for the District of Columbia (USDC-DC) issued a preliminary injunction ruling staying the imposition of President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA). This preliminary injunction applies to tariffs that would be paid by the two named plaintiffs – Learning Resources, Inc. and hand2mind, Inc. The tariffs enjoined are those that have been implemented against Canada, China, and Mexico (IEEPA tariffs for the flow of illicit drugs distributed in the United States; see Update of February 3, 2025) and the reciprocal tariffs (IEEPA tariffs of 10% on all countries and additional duty rates on specific countries; see Update of April 3, 2025). In the opinion, Judge Rudolph Contreras stated that, “This case is not about tariffs qua tariffs. It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The Court agrees with Plaintiffs that it does not.”

This is the second ruling in less than a day to find that President Trump likely exceeded his authority in issuing the Executive Orders implementing these tariffs. See also Update of May 29, 2025 providing details on ruling by the U.S. Court of International Trade (CIT). In this USDC-DC opinion, several specific issues were addressed:

  1. The Court denied the government’s request to transfer the case to the CIT stating that it must look to IEEPA’s text to determine whether it is a law providing for tariffs. Noting that IEEPA does not use the words “tariffs” or “duties,” and that there is no residual clause granting the President powers beyond those expressly listed, the opinion notes that, “Every time Congress delegated the President the authority to levy duties or tariffs in Title 19 of the U.S. Code, it established express procedural, substantive, and temporal limits on that authority.” Concluding that such “comprehensive statutory limitations would be eviscerated if the President could invoke a virtually unrestricted tariffing power under IEEPA,” the Court states that because “IEEPA is not a ‘law . . . providing for tariffs,’ this Court, not the CIT, has jurisdiction over this lawsuit.”
  2. Based on this analysis, the Court found that “because IEEPA does not authorize the President to impose tariffs, the [IEEPA] tariffs … are ultra vires {i.e., ‘beyond the powers’ requiring legal authority]” and the plaintiffs are likely to succeed with their claim that President Trump in implementing them violated the Administrative Procedures Act.
  3. Because the plaintiffs established that they will likely suffer irreparable harm absent a preliminary injunction because the tariffs “pose an existential threat to their businesses,” the judge issued a temporary injunction for the two plaintiffs (small family-owned educational toy companies) indicating that such an action “will have virtually no effect on the government” and that without a preliminary injunction, “Plaintiffs will sustain significant and unrecoverable losses.” The Court has stayed operation of the preliminary injunction for 14 days to allow for an appeal.

This ruling is limited in scope to the named plaintiffs. It should also be noted that this ruling does not invalidate tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962.