CBP FINALIZES JAPAN TARIFF FRAMEWORK IMPLEMENTATION
U.S. Customs and Border Protection (CBP) and the Department of Commerce have finalized amendments to the Harmonized Tariff Schedule of the United States (HTSUS) to implement Executive Order 14345. The changes set a 15 percent tariff for most Japanese imports, establish industry-specific treatment for automobiles, aerospace products, pharmaceuticals, and critical minerals, and update CBP procedures for entry processing and Foreign Trade Zone (FTZ) admissions. According to the Federal Register notice, these measures apply to goods entered for consumption on or after September 16, 2025, with limited transition relief for shipments already in transit.
HOW WILL THE NEW CBP MODIFICATIONS IMPACT KEY INDUSTRIES?
CBP’s notice sets new parameters that will reshape compliance requirements across multiple high-impact sectors.
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Automotive Sector: New HTSUS headings 9903.94.40 through 9903.94.43 create separate duty treatment for passenger vehicles, light trucks, and automotive parts. Goods with a Column 1 duty rate below 15 percent must now pay additional duties to meet the 15 percent threshold, while those already at or above the threshold keep their current rate. These provisions replace earlier Section 232 automotive duties.
- Aerospace Industry: Civil aircraft, engines, parts, and components classified under the specified HTSUS headings keep duty-free treatment under the WTO Agreement on Trade in Civil Aircraft through new heading 9903.96.02. The exclusion does not apply to unmanned aircraft or drones.
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Pharmaceuticals and Critical Minerals: Generic pharmaceuticals, their ingredients, and natural resources not available in the United States stay exempt from reciprocal tariffs to maintain supply chain continuity.
WHAT ENTRY REQUIREMENTS HAS CBP ISSUED FOR AUTOMOTIVE IMPORTS?
CBP’s guidance now directs that passenger vehicles, light trucks, and automotive parts admitted into FTZs on or after September 16, 2025, enter in privileged foreign status under 19 CFR 146.41. Duties are then assessed on the HTSUS classification and rate in effect when the goods enter for consumption, ensuring accurate tariff application.
CBP also confirmed that importers cannot claim duty-free or reduced-rate treatment under Chapter 99 for these products. Antidumping, countervailing, and other duties still apply in addition to the ad valorem tariff rate.
ADDITIONAL READING: WHAT IS THE DIFFERENCE BETWEEN FOREIGN TRADE ZONES AND BONDED WAREHOUSES FOR TARIFF MITIGATION?
ARE THERE TRANSITION EXEMPTIONS FOR IN-TRANSIT SHIPMENTS?
CBP opened a short transition period to prevent disruption for cargo already en route. Shipments loaded at the port of export before 12:01 a.m. EDT on August 7, 2025, and entered before October 5, 2025, qualify for duty exemptions. This grace period gives importers time to fulfill contracts and revise sourcing strategies before incurring duties.
WHAT STEPS SHOULD IMPORTERS TAKE NOW?
Importers should take immediate action to ensure compliance with the new tariff framework:
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Verify HTSUS Classifications: Review all Japanese-origin products to confirm they are classified under the correct headings, particularly 9903.02.72, 9903.02.73, 9903.94.40-.43, and 9903.96.02.
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Update FTZ Admission Procedures: Work with FTZ operators and customs brokers to ensure privileged foreign status is applied to affected vehicles and parts.
- Monitor Regulatory Updates: Continue to track Federal Register notices and CBP Cargo Systems Messaging Service (CSMS) updates for further implementation details or potential amendments.
CBP and the Department of Commerce will continue monitoring Japan’s compliance. Additional tariff actions may follow if the United States determines that further adjustments are necessary to protect economic and security interests.
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