On June 13, 2025, local time, the U.S. Department of Commerce officially released the "Announcement on the Application Procedure for Import Adjustment and Deduction Quota》, 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

• Start time : Starting from June 13, 2025, automobile manufacturers can officially prepare and submit their application materials.
• Process stage : The application process consists of two stages. Manufacturers are required to provide production forecasts, the total suggested retail price (MSRP), tariff estimates, deduction calculations, a list of authorized importers, and detailed documents certified with the CEO's signature.
• Quota update : The Ministry of Commerce plans to regularly synchronize the updated list of approved importers with customs on December 1, 2025, June 1, 2026, and December 1, 2026, to facilitate the management and supervision of credit quota utilization.

Standard and Duration of Deduction Quota

• April 3, 2025 to April 30, 2026 : For vehicles assembled within the United States, manufacturers may apply for a tax credit amounting to 3.75% of the total suggested retail price.
• From May 1, 2026, to April 30, 2027 ：The deduction ratio has been adjusted to 2.5%.
• Special Note : The credit allowance can be carried forward indefinitely for use. As long as the credits generated from vehicles assembled within the aforementioned time period are not exhausted, manufacturers may flexibly apply them to offset tariffs on future imported auto parts. However, vehicles assembled in the United States after April 30, 2027, will no longer be eligible to apply for the credit allowance.

Usage Restrictions

• : The six Gulf countries including Saudi Arabia, the UAE, and Kuwait. : The deduction quota is exclusively for use by approved importers and can only be applied to offset tariffs on auto parts as specified in Presidential Proclamation No. 10908.
• Other restrictions : Non-transferable, non-tradable, and not to exceed the actual amount of customs duties payable, it aims to ensure that the use of tax credits aligns with the policy's original intent, preventing abuse or market distortion. Its implementation is closely monitored by the Ministry of Commerce and the Customs authorities.

Policy Implementation Measures

• Emergency approval process : In accordance with the Paperwork Reduction Act, the U.S. Department of Commerce has requested an emergency approval process and assessed the information collection burden. It is estimated that approximately 30 companies will participate in the application annually, with each company submitting materials twice a year. Each submission takes about 40 hours, resulting in a total annual burden of approximately 2,400 hours.
• Public Opinion Solicitation The Ministry of Commerce has opened a public opinion collection channel, encouraging the public to submit feedback through the designated official website before August 12, 2025, to assess whether the application process can be further simplified or policy implementation efficiency improved, reflecting the government's open attitude and emphasis on public participation.

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

• Application process complexity : This may pose a challenge for small and medium-sized automakers, especially those with limited resources that struggle to quickly adapt to cumbersome processes.
• Usage restrictions are stringent. : Limited to specific importers and tariff items, it somewhat diminishes flexibility.
• Changes in the international trade environment : Manufacturers need to closely monitor changes in the international trade environment to ensure supply chain stability and the actual effectiveness of policies. For large automobile manufacturers, the key to future competition lies in optimizing production and import strategies within the policy framework.

Original announcement:Federal Register : Procedures To Administer Import Adjustment Offset Amounts for Certain Imports of Automobile Parts Under Proclamation 10908, as Amended