From the SEMA Washington, D.C., office
The United States tariff landscape continues its steady evolution under the Trump Administration. Here are the latest developments, including details on specialty-equipment-industry impacts of trade agreements with Japan and the United Kingdom, as well as the latest opening of the Section 232 steel and aluminum tariff inclusions process.
Commerce Tariff Inclusion Process for Steel and Aluminum Derivative Items
The U.S. Department of Commerce on September 15 opened the process for the next round of inclusions under the steel and aluminum Section 232 tariffs, which will close on September 29, 2025. Companies that import products containing any amount of steel or aluminum and that are not currently subject to the steel and aluminum tariffs should monitor the process.
- The process is not an exclusion mechanism. Rather, it is a means to expand tariff coverage, which could have direct impacts on specialty aftermarket parts and components that contain derivative steel or aluminum elements, such as brackets, fittings or heat exchangers. If those derivative products are subject to the 50% steel and aluminum tariffs, which are applied on the percentage of steel and aluminum that comprises the product, costs could rise significantly. However, it's important to note that products covered by automotive tariffs aren't subject to 232 tariffs. Monitoring submissions during this window and participating in the public comment process may be important steps to protect supply chains.
Following this two-week submission window, during which interested parties can request additions to products covered by the tariffs, Commerce will publish the requests and allow public comment for 14 days (expected to take place between September 30 and October 14).
- Click here to learn more about how the Commerce Department is allowing parties to request that products containing steel and aluminum can be added to the list of derivative articles subject to the tariffs.
During the final step of the process, Commerce will review all submissions and comments before determining whether any articles should be added to the list of derivative articles. Commerce has 60 days from the submission of the requests to decide on derivative items whose steel and aluminum content will be subject to tariffs.
The Commerce Department previously added 407 tariff subheadings to the list of derivative articles subject to the tariffs in August.
- Click here to see SEMA's recent article on which products were included.
Increased Market Access to Japan
The U.S.-Japan trade agreement, concluded this summer and implemented earlier this month, makes notable changes for autos and auto parts. Under the deal, tariffs on Japanese autos and parts are being reduced from 25%, to 15%. The reduction took effect within a week of the executive order's publication and applies retroactively to August 7, meaning importers may be eligible for refunds on qualifying shipments.
In addition to the rate change, the agreement establishes a reciprocal tariff framework in which Japanese imports are generally subject to a 15% duty unless their baseline tariff rate is already at or above that level. Japan committed to a $550 billion investment program across strategic United States sectors and agreed to regulatory adjustments, including recognition of United States safety standards for vehicles. Recognizing American safety standards is a huge step forward in the industry. For decades, Japanese safety standards were more stringent than some of its international trading partners, so the agreement with the United States marks a seminal moment in international trade. Now, American autos--and by proxy aftermarket performance parts--will have access to a new market with high demand.
- For aftermarket businesses, this means Japan-sourced components are now more competitive in American markets, though duties remain in place.
Reciprocal Trade with the United Kingdom
A parallel arrangement with the United Kingdom (U.K.), known as the Economic Prosperity Deal, also reshapes trade flows. U.K.-manufactured vehicles exported to the United States now face a reduced tariff of 10% (down from 27.5%) for up to 100,000 vehicles annually. Parts produced in the U.K. for use in these vehicles benefit from the same 10% tariff.
- For the aftermarket, this provides a measure of relief. Steel and aluminum remain a sticking point: while U.K. exports are excluded from the recent escalation of Section 232 tariffs to 50%, they remain subject to the longstanding 25% rate. Aftermarket businesses sourcing components or raw materials from the U.K. will need to keep a close watch on quota thresholds and the outcome of ongoing steel and aluminum discussions.
Looking Ahead
Although the outlines of these trade deals are now clear, various unresolved issues linger. The implementation details of the Japan agreement, including refund procedures through U.S. Customs and Border Protection, are still being clarified. The U.K. agreement hinges on the 100,000-vehicle quota, meaning costs could rise once the threshold is exceeded.
- The inclusions process under Section 232 introduces a new element of uncertainty as stakeholders petition to add products to the tariff scope. For the specialty automotive aftermarket, the practical implications will come down to classification, sourcing and documentation. Companies and importers should review their inventory to determine which components are affected, ensure recordkeeping is strong enough to take advantage of lower duty rates or refunds and consider long-term supply chain realignment.
Questions? Contact Juan Mejia, SEMA senior manager for federal government affairs, at juanm@sema.org.
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