IMPLEMENTATION MARKS A NEW COMPLIANCE ENVIRONMENT FOR U.S.-UK TRADE
June 30, 2025, signaled the first operational checkpoint in the rollout of the U.S.-UK Economic Prosperity Deal under Executive Order 14309. The new tariff provisions introduce quota administration, reduced duty rates, and non-stacking protocols that directly impact how eligible UK-origin goods are now classified and processed at entry into the U.S. market.
NEW U.K.-ORIGIN AUTOMOBILE TARIFF-RATE QUOTA AND AUTO PARTS DUTY PROCEDURES
For automobile and auto parts importers, the shift requires immediate alignment between entry summary filings and the applicable 10% combined duty rate for qualifying passenger vehicles and auto parts. The prorated quota of 65,205 vehicles for 2025 introduces additional complexity, especially for program managers overseeing UK distribution lanes. Beginning in 2026, the full 100,000-unit annual tariff-rate quota (TRQ) will apply, administered quarterly. Vehicles imported above this threshold will be subject to the standard 25% Section 232 duty.
U.K.-ORIGIN AUTO PARTS 10% DUTY RATE
U.S. importers may now claim a 10% total duty rate on eligible automotive parts from the UK using HTSUS 9903.94.32.
This reduced rate covers parts for:
- Passenger vehicles (sedans, SUVs, crossovers, minivans)
- Light trucks (subject to specific HTSUS subheadings)
To properly claim the 10% rate:
- Report HTSUS 9903.94.32 followed by the applicable Chapter 1-97 HTSUS classification
- Report the duty on 9903.94.32 and the line value on the Chapter 1-97 line
- Filers must not claim a lower rate under any other Chapter 99 provision
These parts are exempt from reciprocal tariffs under Executive Order 14257 and are subject to non-stacking provisions defined by Executive Order 14289 and Proclamation 10947.
FTZ AND DRAWBACK LIMITATIONS FOR AUTO PARTS
Any covered auto part admitted into a U.S. Foreign Trade Zone (FTZ) on or after June 30, 2025, must be entered under privileged foreign status, unless it qualifies for domestic status under 19 C.F.R. 146.43. Drawback is not available for any additional duties imposed under this program.
CIVIL AIRCRAFT UK-ORIGIN PRODUCTS ELIGIBLE FOR PREFERENTIAL DUTY TREATMENT
Aircraft manufacturers and aerospace suppliers now operate under a distinct tariff framework as well. Duty treatment for civil aircraft products hinges not only on classification but on compliance with longstanding multilateral agreements and newly codified exemptions from Section 232 and reciprocal duties.
Effective June 30, 2025, eligible articles may be filed under HTSUS 9903.96.01, including:
- Civil aircraft (non-military)
- Aircraft engines, components, and subassemblies
- Ground flight simulators and parts
ACTION PLAN: UK-ORIGIN AUTOMOBILE, AIRCRAFT, AND PARTS COMPLIANCE
Importers should take the following steps to remain compliant with new U.S.-UK tariff provisions effective June 30, 2025:
- Validate HTS classifications for automobiles, auto parts, and aircraft products subject to headings 9903.94.32 and 9903.96.01.
- Monitor TRQ balances for UK-origin automobiles to avoid exceeding the 2025 prorated 65,205-unit limit.
- Consider admitting auto parts into FTZs under privileged foreign status if not eligible for domestic status under 19 C.F.R. 146.43.
- Exclude drawback claims on automobile and auto part entries subject to Executive Order: Implementing the General Terms of the United States of America-United Kingdom Economic Prosperity Deal duty provisions.
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