AutoTechInsight
Rapid Response: Impact analysis of US automotive tariff actions - Issue #16
In this latest edition of Rapid Response, we analyze how the framework agreements with the European Union and Japan have begun implementation, though there has been no further update on South Korea. The S&P Global Mobility tariff-related auto industry assumptions are largely unchanged. The recent activity will result in minor tariff-related changes with the S&P Global Mobility September 2025 sales and production forecasts, currently in development. The activity related to autos tariffs from the US recently has been within the prior assumptions and expectations. However, the US assessed higher reciprocal tariffs than expected.
In August and September, the US President issued Executive Orders to begin implementing the agreements with the EU and Japan. These orders provided more clarity on the timeline for implementing an adjusted tariff amount.
There is no change to the top-level terms. Each agreement set an import tariff of 15% for most goods shipped to the US, and zero tariff for most US exports to those countries, including autos and auto parts. The Section 232 tariffs on steel, aluminum and copper remain, though the US and the EU are working toward a quota system for steel and aluminum exports to the US.
With the Sept. 4, 2025, executive order regarding trade with Japan, the 15% reciprocal tariff on general goods is retroactive to Aug. 7, 2025, which when the latest reciprocal tariffs were effective for most other countries. However, there is no clarification that the new 15% autos tariff will be retroactive to the same date or simply is in the new rate. It may be that autos tariffs are not reduced to 15% until mid-September. Japan agreed to reduce non-tariff barriers to US imports, including autos. The only autos change detailed so far is that Japan will allow imports of US-produced vehicles which meet US safety and emissions standards to be sold in Japan without further testing or certification.
The European Union and the US signed a framework on Aug. 21, 2025, which implemented the earlier stated key points. However, it also noted that the US would not reduce the 25% Section 232 tariff on autos and auto parts until the EU “formally introduces the necessary legislative proposal to enact the tariff reductions.” The European Commission introduced the two necessary proposals on Aug 28; according to the agreement, the action will mean that the 15% tariff on autos and auto parts will apply retroactively to Aug 1, 2025, once the proposals are passed. Passage of the proposals may take several weeks and may not be complete until October.
