Commerce Issues Procedures on Applying for the US Content Partial Duty Exemption Under Section 232 MHDV Tariffs

Under this notice, upon submission of certain documentation and Commerce’s approval, the Section 232 tariffs of 25% will apply only to the non-US content of imported MDHV models that qualify under the United States-Mexico-Canada Agreement (USMCA). The process significantly mirrors that established for the Section 232 automotive tariff regime in May 2025. 

What’s New and Why It Matters

Under Presidential Proclamation 10984, importers of MHDVs may submit documentation to Commerce identifying the amount of US content in each USMCA-qualifying model imported into the United States. Upon approval by Commerce, the additional tariff may then apply exclusively to the value of the non-US content, potentially mitigating the 25% rate significantly. 

Importers may begin submitting documentation starting on February 2 and must file electronically to the dedicated Commerce email address. Eligibility is limited to MHDVs imported from Mexico or Canada that qualify for USMCA preferential tariff treatment. 

Core Concepts Borrowed From the USMCA

Several required data elements rely on existing USMCA concepts. First, “U.S. content” is defined for this process as US production and production-related activity directly supporting manufacture of the imported vehicle, consistent with the USMCA definition of “production” in Article 4.1. Second, where values vary within a model, importers may use the USMCA Automotive Appendix Article 5 averaging methodology for the declared customs value, the US content value, and correspondingly the non-US content value. Non-US content is calculated by subtracting US content from the total vehicle value.

What Must Be Submitted

Commerce requires a model-by-model submission, certified by the importer’s CFO, general counsel, or equivalent senior officer. 

Submissions must identify: 

• The total declared customs value under 19 U.S.C. 1401a, with the option to use averaging where values vary within the model under the USMCA Automotive Appendix Article 5 methodology.

• The total US content value measured as the portion of the vehicle’s value attributable to US production and production-supporting activity, with averaging permitted if content varies within the model.

• The total non-US content, calculated as total value minus US content; averaging may be used if applied to the preceding values.

• MHDV production locations and the country of final assembly.

• Proof of USMCA eligibility, including the origin certification, approved producer certifications for North American steel and aluminum and for labor value content, and confirmation of whether the model is covered by an approved Alternative Staging Regime.

• Importer and manufacturer identifiers, including corporate names, importer of record numbers, manufacturing facilities, country of origin, and entry numbers if requesting retroactive treatment.

Review, Determinations, and Validity

Commerce will review submissions for completeness, may seek supplemental information, and, after verification, will notify both the importer and US Customs and Border Protection (CBP) of the determinations regarding US and non-US content. CBP will receive a list of authorized importers and models. The additional tariff will then apply solely to the non-US content for those models. Determinations issued in 2026 are valid only for vehicles imported in 2025 or 2026. Beginning with 2027 imports, determinations are valid for one calendar year, and documentation should be submitted by October 1 to be processed efficiently. At the Secretary of Commerce’s discretion, treatment may be applied retroactively for vehicles imported on or after November 1, 2025, if entry numbers are provided.

Compliance Risks

If CBP determines that declared US content is overstated or inconsistent with Commerce’s approved figure, the 25% tariff applies to the full value of all vehicles of the same model imported by the same importer, retroactively and prospectively until corrected. This consequence is in addition to any other applicable remedies.

What Comes Next

Because key inputs — US content definition, averaging permissions, and origin certifications — map directly to USMCA constructs, rigorous USMCA compliance will be decisive in realizing tariff savings. A potential approach is to proceed in phases: first validate USMCA qualification and supporting certifications; then quantify US content and assess whether averaging is appropriate; and finally prepare a defensible, model-specific submission package for Commerce. 

Our team includes former CBP and government attorneys, including the principal CBP attorney involved in implementing the USMCA and its provisions. For more information, please contact the authors of this alert or a member of our Customs & Import Compliance team.