On June 13,2025,local time,the U.S.Department of Commerce officially released the "》,which is a significant measure by the U.S.government to promote the development of the domestic automotive manufacturing industry and reduce reliance on foreign products.

According to Presidential Proclamation No.10925 issued on April 29,2025,this program provides automakers with a clear mechanism to apply for "Import Adjustment Credit" to offset part of the tariffs on imported auto parts,thereby reducing production costs and enhancing the competitiveness of the domestic U.S.auto manufacturing market.

Application procedure details

• Starttime:StartingfromJune13,2025,automobilemanufacturerscanofficiallyprepareandsubmittheirapplicationmaterials.
• Processstage:Theapplicationprocessconsistsoftwostages.Manufacturersarerequiredtoprovideproductionforecasts,thetotalsuggestedretailprice(MSRP),tariffestimates,deductioncalculations,alistofauthorizedimporters,anddetaileddocumentscertifiedwiththeCEO’ssignature.
• Quotaupdate:TheMinistryofCommerceplanstoregularlysynchronizetheupdatedlistofapprovedimporterswithcustomsonDecember1,2025,June1,2026,andDecember1,2026,tofacilitatethemanagementandsupervisionofcreditquotautilization.

Standard and Duration of Deduction Quota

• April3,2025toApril30,2026:ForvehiclesassembledwithintheUnitedStates,manufacturersmayapplyforataxcreditamountingto3.75%ofthetotalsuggestedretailprice.
• FromMay1,2026,toApril30,2027：Thedeductionratiohasbeenadjustedto2.5%.
• SpecialNote:Thecreditallowancecanbecarriedforwardindefinitelyforuse.Aslongasthecreditsgeneratedfromvehiclesassembledwithintheaforementionedtimeperiodarenotexhausted,manufacturersmayflexiblyapplythemtooffsettariffsonfutureimportedautoparts.However,vehiclesassembledintheUnitedStatesafterApril30,2027,willnolongerbeeligibletoapplyforthecreditallowance.

Usage Restrictions

• :ThesixGulfcountriesincludingSaudiArabia,theUAE,andKuwait.:ThedeductionquotaisexclusivelyforusebyapprovedimportersandcanonlybeappliedtooffsettariffsonautopartsasspecifiedinPresidentialProclamationNo.10908.
• Otherrestrictions:Non-transferable,non-tradable,andnottoexceedtheactualamountofcustomsdutiespayable,itaimstoensurethattheuseoftaxcreditsalignswiththepolicy’soriginalintent,preventingabuseormarketdistortion.ItsimplementationiscloselymonitoredbytheMinistryofCommerceandtheCustomsauthorities.

Policy Implementation Measures

• Emergencyapprovalprocess:InaccordancewiththePaperworkReductionAct,theU.S.DepartmentofCommercehasrequestedanemergencyapprovalprocessandassessedtheinformationcollectionburden.Itisestimatedthatapproximately30companieswillparticipateintheapplicationannually,witheachcompanysubmittingmaterialstwiceayear.Eachsubmissiontakesabout40hours,resultinginatotalannualburdenofapproximately2,400hours.
• PublicOpinionSolicitationTheMinistryofCommercehasopenedapublicopinioncollectionchannel,encouragingthepublictosubmitfeedbackthroughthedesignatedofficialwebsitebeforeAugust12,2025,toassesswhethertheapplicationprocesscanbefurthersimplifiedorpolicyimplementationefficiencyimproved,reflectingthegovernment’sopenattitudeandemphasisonpublicparticipation.

Policy background

In recent years,the global trade environment has become increasingly uncertain,with the U.S.government promoting the reshoring of manufacturing,particularly in key sectors such as automobile production.The introduction of import adjustment tax credits aims to incentivize automakers to increase domestic production activities in the U.S.and reduce reliance on foreign components.

Challenges faced

• Applicationprocesscomplexity:Thismayposeachallengeforsmallandmedium-sizedautomakers,especiallythosewithlimitedresourcesthatstruggletoquicklyadapttocumbersomeprocesses.
• Usagerestrictionsarestringent.:Limitedtospecificimportersandtariffitems,itsomewhatdiminishesflexibility.
• Changesintheinternationaltradeenvironment:Manufacturersneedtocloselymonitorchangesintheinternationaltradeenvironmenttoensuresupplychainstabilityandtheactualeffectivenessofpolicies.Forlargeautomobilemanufacturers,thekeytofuturecompetitionliesinoptimizingproductionandimportstrategieswithinthepolicyframework.

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