For approved USMCA-qualifying MHDVs, Section 232 25% duty now applies only to non‑U.S. content via 9903.74.03/9903.74.06 for entries from 11/1/2025.

CBP’s CSMS #68559236 provides binding operational guidance on how to apply Section 232 duties to certain USMCA-qualifying medium- and heavy-duty vehicles (MHDVs) that have been specifically approved by the Secretary of Commerce under Presidential Proclamation 10984.

Under this regime, the 25% Section 232 ad valorem duty no longer applies to the full customs value of the vehicle for these approved cases. Instead, it applies exclusively to the value of the non‑U.S. content of the MHDV. The U.S. content portion is carved out and subject to a 0% additional Section 232 duty. This is implemented through two new/defined Chapter 99 provisions:

• HTSUS 9903.74.03 – applies to the non‑U.S. content of approved USMCA-qualifying MHDVs. A 25% additional ad valorem Section 232 duty is assessed on the value of the non‑U.S. content only.
• HTSUS 9903.74.06 – applies to the U.S. content of those same vehicles. A 0% additional ad valorem Section 232 duty is assessed on the value of the U.S. content.

The change is effective for covered vehicles entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Daylight Time on November 1, 2025. Only MHDVs that (1) qualify for preferential tariff treatment under USMCA and (2) have received explicit approval from the Secretary of Commerce under the procedures published at 91 FR 4504 are eligible for this special treatment.

For customs brokers and importers, the key impact is on how the entry summary is structured and how Section 232 duties are calculated:

1) Determine eligibility and obtain approval:

• Confirm that the vehicle qualifies for USMCA preferential treatment and that Commerce has issued an approval allowing the Section 232 duty to be applied only to non‑U.S. content.
• Use Commerce’s approved non‑U.S. and U.S. content values as the basis for entry reporting.

2) Split the entry into two lines per vehicle:

• Line 1 – Non‑U.S. content:

– Report the total quantity of the imported MHDVs.

– Report the entered value equal to the approved non‑U.S. content value.

– Apply HTSUS 9903.74.03 and calculate 25% Section 232 duty on this value.

– Report the applicable Chapter 1–97 HTSUS classification for the vehicle (same HTS must be used on both lines).

– Report SPI code “S” to indicate USMCA preferential treatment.

– Report the country of origin (same on both lines).

– Report all other applicable duties (e.g., base MFN or USMCA duty, ADD/CVD) as appropriate.

• Line 2 – U.S. content:

– Report quantity as 0.

– Report the entered value equal to the U.S. content, calculated as total entered value of the article minus the non‑U.S. content value.

– Apply HTSUS 9903.74.06 with a 0% additional Section 232 duty rate.

– Use the same Chapter 1–97 HTSUS classification and country of origin as on line 1.

– Report SPI code “S”.

– Report any other applicable duties (e.g., ADD/CVD) if they legally apply to the full article; ensure consistency with agency instructions.

3) Systems and documentation:

• Update ACE filing templates and broker SOPs for MHDVs to include the two-line structure and correct use of 9903.74.03 and 9903.74.06.
• Maintain Commerce approval letters and supporting calculations of U.S. vs. non‑U.S. content in the entry file for audit and post‑summary review.

This guidance does not change the nominal 25% Section 232 rate but materially changes the duty base for approved USMCA-qualifying MHDVs, potentially reducing Section 232 liability. Brokers must ensure correct Chapter 99 usage, SPI “S” reporting, and value allocation to avoid miscalculation of duties or ACE rejections.