91 FR 47807 · published 2026-07-29
· Commerce Department, International Trade Administration
Mirrored from the Federal Register (retrieved 2026-08-08) —
the official copy is at federalregister.gov
(their site may ask for human verification).
On May 15, 2026, the International Trade Administration published a Notice titled "Amending the Procedures To Administer Import Adjustment Offset Amounts for Certain Imports of Automobile Parts Under Proclamation 10908 to Include Medium- and Heavy-Duty Vehicle Parts" (May 15 Notice), which established amended procedures for automobile and medium- and heavy-duty vehicle (MHDV) manufacturers to apply for and use the import adjustment offset amounts established by Presidential Proclamation 10925 of April 29, 2025, "Amendments to Adjusting Imports of Automobiles and Automobile Parts Into the United States", and Presidential Proclamation 10984 of October 17, 2025, "Adjusting Imports of Medium- and Heavy-Duty Vehicles, Medium- and Heavy-Duty Vehicle Parts, and Buses Into the United States." This notice provides procedures to allow domestic manufacturers of automobile engines and MHDV engines to claim import adjustment offsets for imports of parts in a manner consistent with those Proclamations. The procedures exclude certain engine assembly operations determined to be limited production operations from being considered in the calculation of offsets.
[Federal Register Volume 91, Number 144 (Wednesday, July 29, 2026)]
[Notices]
[Pages 47807-47811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-15280]
DEPARTMENT OF COMMERCE
International Trade Administration
[Docket No. 260720-0174]
RIN 0625-XC060
Procedures To Administer Import Adjustment Offset Amounts for
Certain Imports of Automobile and Medium- and Heavy-Duty Vehicle Parts
for Automobile and Medium- and Heavy-Duty Vehicle Engine Manufacturers
AGENCY: International Trade Administration, U.S. Department of
Commerce.
ACTION: Notice.
SUMMARY: On May 15, 2026, the International Trade Administration
published a Notice titled ``Amending the Procedures To Administer
Import Adjustment Offset Amounts for Certain Imports of Automobile
Parts Under Proclamation 10908 to Include Medium- and Heavy-Duty
Vehicle Parts'' (May 15 Notice), which established amended procedures
for automobile and medium- and heavy-duty vehicle (MHDV) manufacturers
to apply for and use the import adjustment offset amounts established
by Presidential Proclamation 10925 of April 29, 2025, ``Amendments to
Adjusting Imports of Automobiles and Automobile Parts Into the United
States'', and Presidential Proclamation 10984 of October 17, 2025,
``Adjusting Imports of Medium- and Heavy-Duty Vehicles, Medium- and
Heavy-Duty Vehicle Parts, and Buses Into the United States.'' This
notice provides procedures to allow domestic manufacturers of
automobile engines and MHDV engines to claim import adjustment offsets
for imports of parts in a manner consistent with those Proclamations.
The procedures exclude certain engine assembly operations determined to
be limited production operations from being considered in the
calculation of offsets.
DATES: Applications from domestic manufacturers of automobile engines
and MHDV engines can be submitted starting July 29, 2026.
ADDRESSES: Offset applications must be submitted electronically to:
[email protected].
FOR FURTHER INFORMATION CONTACT: Emily Davis, Director for Public
Affairs, International Trade Administration, U.S. Department of
Commerce, 202-482-3809, [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
On March 26, 2025, the President issued Proclamation 10908, finding
that imports of automobiles (defined as passenger vehicles (sedans,
sport utility vehicles, crossover utility vehicles, minivans, and cargo
vans) and light trucks) and certain automobile parts continue to
threaten to impair the national security of the United States and
imposing specified tariffs to adjust imports of automobiles and certain
automobile parts so that such imports will not threaten to impair
national security pursuant to section 232 of the Expansion Act of 1962,
as amended (19 U.S.C. 1862) (90 FR 14705). Proclamation 10908 imposed a
25 percent tariff on certain imports of automobiles, effective April 3,
2025, and certain imports of automobile parts, effective May 3, 2025.
On April 29, 2025, the President issued Proclamation 10925, which
allowed for automobile manufacturers assembling automobiles in the
United States to apply for an import adjustment offset amount, which
would offset certain tariff liability under Proclamation 10908 on
imports of automobile parts (90 FR 18899). Proclamation 10925 required
the Secretary of Commerce (Commerce) to establish a process by which
automobile manufacturers may submit documentation supporting
eligibility for an import adjustment offset amount. The International
Trade Administration established an import adjustment offset process
through a June 13, 2025 Notice, ``Procedures To Administer Import
Adjustment Offset Amounts for Certain Imports of Automobile Parts Under
Proclamation 10908, as Amended'' (90 FR 25027).
On October 17, 2025, the President issued Proclamation 10984,
finding that imports of MHDVs, certain MHDVPs, and buses threaten to
impair the national security of the United States and imposing
specified tariffs to adjust imports of MHDVs, certain MHDVPs, and buses
so that such imports will not threaten to impair national security (90
FR 48451). Given the ``close connections and overlap between part
suppliers'' for the automobile industry and the MHDV industry,
Proclamation 10984 also amended Proclamation 10925 to conform certain
aspects of the tariff system imposed by Proclamations 10908 and 10925
for automobiles and automobile parts to the tariff system imposed by
Proclamation 10984. On May 15, 2026, the International Trade
Administration amended the import adjustment offset process to allow
domestic manufacturers to apply for and receive an import adjustment
offset for MHDVs assembled in the United States (91 FR 27914).
Proclamation 10984 also allowed engine manufacturers assembling
automobile engines and MHDV engines in the United States to apply for
an import adjustment offset amount, which would offset certain tariff
liability under Proclamations 10908 and 10984 on imports of engine
parts. Proclamation 10984 required Commerce to establish an import
adjustment offset process for automobile engine manufacturers and MHDV
engine manufacturers equivalent to that provided for automobile
manufacturers and MHDV manufacturers, with offset accruals based on the
aggregate value of automobile engine and MHDV engines assembled in the
United States by the engine manufacturer, with the same accrual
percentage rate and U.S. assembly restrictions as were provided in the
Proclamation for automobile manufacturers and MHDV manufacturers. This
notice builds on the May 15 Notice by announcing the Engine Offset
Process, which allows domestic manufacturers of automobile engines and
MHDV engines to apply for and receive import adjustment offsets,
including application, documentation, and certification requirements,
eligibility conditions, and coordination with U.S. Customs and Border
Protection (CBP). This notice was separate from the May 15 notice, as
engines are a separate product category from automobiles and MHDVs, and
Commerce needed time to research the engine industry and develop
appropriate procedures for these distinct products. Import Adjustment
Offset amounts may be used to offset any tariff liability incurred
under clauses 1, 7, or 12 of Proclamation 10984 or Proclamation 10908
on MHDV or automobile parts.
Proclamation 10984 authorized Commerce to issue regulations and
guidance consistent with that proclamation, including addressing
operational necessity. Commerce has determined that, in light of the
``close connections and overlap between part suppliers'' for the
automobile industry and the MHDV industry identified in Proclamation
10984, and the fact that the President found that conforming the tariff
systems between automobiles and MHDVs will more effectively address the
threat to national security found in Proclamations 10908 and 10984, it
is necessary to allow automobile engine and MHDV engine manufacturers
assembling engines in the United States to apply for an import
adjustment offset amount for parts, allowing them to offset tariff
liability under both Proclamation 10984 and Proclamation 10908.
Proclamation 10984 provides Commerce with the authority to prohibit
engine manufacturers from using offset amounts for imports of products
where offsets would be inconsistent with addressing the threat to
national security found in that Proclamation. Through Proclamation
10984, the President sought to strengthen supply chains, bolster
industrial resilience, create high-quality jobs that will expand the
skilled workforce in the United States, and increase domestic capacity
utilization and U.S. market share. Similarly, for automobiles,
Proclamation 10925 expressed the goals of reducing reliance on foreign
manufacturing and importation of automobiles and automobile parts,
strengthening U.S. vehicle assembly operations, shifting manufacturing
activity into the United States, creating jobs in the automotive
industry, and ensuring that other benefits of production are
concentrated in the United States.
In light of these goals, and consistent with the May 15 Notice,
Commerce has determined that it is appropriate to exclude assembly
operations determined to be ``limited production operations'' from
being considered in the calculation of engine offsets. Commerce has
determined that engine production operations in the United States that
do not utilize a minimum number of U.S. originating core engine
components should be considered to be ``limited production operations''
under the Engine Offset Process; for purposes of the Engine Offset
Process, ``core engine components'' are turbochargers and certain other
engine parts identified in Table A.2 in the Appendix to Annex 4-B
(Product-Specific Rules of Origin) of the United States-Mexico-Canada
Trade Agreement (USMCA) (specifically heads, blocks, crankshafts,
pistons, and rods). In the first two years of the Engine Offset
Process, only engine production operations that utilize two or more
U.S. originating core engine components are eligible for offsets. For
year three of the Engine Offset Process and any subsequent years, only
engine production operations that utilize four or more U.S. originating
core engine components are eligible for offsets. A core engine
component is considered to be U.S. originating if it has been
substantially transformed in the United States, i.e., has undergone
processing in the United States which results in an article having a
fundamental change in form, appearance, nature, or character from that
of any imported article used in its production. For purposes of this
requirement, engine blocks and heads will also be considered to be
U.S.-originating if they have undergone all or substantially all
machining in the United States, evaluated by comparing the value added
to the engine blocks and heads by machining in the United States and
outside of the United States. In its Engine Offset Process submission,
a manufacturer must provide a description of the machining performed on
any core engine components that it claims to be U.S. originating,
including the location where the machining occurred.
Proclamation 10925 states that Commerce, ``in consultation with the
Secretary of the Treasury and the Commissioner of CBP, shall issue such
regulations, guidance, and procedures as necessary to carry out the
provisions of this proclamation and Proclamation 10908, and may
establish standards for . . . validating manufacturer certifications.''
To validate engine manufacturer certifications used to calculate
offsets provided in preceding years, Commerce has determined that it is
necessary for U.S. manufacturers to describe in detail their
production, including the number, type, and value of engines produced,
from any year in which they claimed an offset. Should an applicant
produce fewer engines or produce engines at a lower value than
projected in information provided to Commerce in previous Engine Offset
Process applications, Commerce may adjust the following year's offset
amount accordingly.
II. Application Process
A. Import Adjustment Offset Amount Structure and Duration
Proclamation 10984 provides that automobile engine and MHDV engine
manufacturers are eligible for an import adjustment offset amount equal
to 3.75 percent of the aggregate value of all engines assembled in the
United States by that manufacturer, as determined annually by Commerce.
The relevant annual periods for MHDV engines are:
Year 1: MHDV engines assembled between November 1, 2025,
and October 31, 2026;
Year 2: MHDV engines assembled between November 1, 2026,
and October 31, 2027;
Year 3: MHDV engines assembled between November 1, 2027,
and October 31, 2028;
Year 4: MHDV engines assembled between November 1, 2028,
and October 31, 2029; and
Year 5: MHDV engines assembled between November 1, 2029,
and October 31, 2030.
The relevant annual periods for automobile engines are:
Year 1: Automobile engines assembled between May 1, 2026
and April 30, 2027;
Year 2: Automobile engines assembled between May 1, 2027
and April 30, 2028;
Year 3: Automobile engines assembled between May 1, 2028
and April 30, 2029; and
Year 4: Automobile engines assembled between May 1, 2029
and April 30, 2030.
As applications for import adjustment offsets for automobiles
assembled between April 5, 2025 and May 1, 2026 included the value of
the engine in the calculation of the automobile import adjustment
offset, Commerce has determined that permitting import adjustment
offsets for automobile engines assembled in the United States in that
same time period would inappropriately allow import adjustment offsets
to accrue multiple times for the same engine.
Import adjustment offset amounts may be used by MHDV engine
manufacturers to reduce tariffs on MHDVPs provided for in Proclamation
10984 or tariffs on automobile parts provided for in Proclamation
10908, as amended, and may be carried forward indefinitely until fully
exhausted, provided they were granted based on qualifying engines
assembled in the relevant annual periods described above. Similarly,
import adjustment offset amounts may be used by automobile engine
manufacturers to reduce tariffs on MHDVPs provided for in Proclamation
10984 or tariffs on automobile parts provided for in Proclamation
10908, and may be carried forward indefinitely until fully exhausted,
provided they were granted based on qualifying engines assembled in the
relevant annual periods described above.
For purposes of this notice:
``MHDVPs'' means the articles subject to duties under
Proclamation 10984 and classified under the subheadings of the
Harmonized Tariff Schedule of the United States (HTSUS) that were
established by Proclamation 10984 in U.S. note 38(i) of subchapter III
of chapter 99 of the HTSUS, or goods entered under a tariff heading
subject to Proclamation 10984, based on a certification by the importer
of record that such parts will be used for MHDV production or repair
activity in the United States.
``Automobile parts'' means the articles subject to duties
under Proclamation 10908 and classified under the subheadings of the
HTSUS that were established by that proclamation, in U.S. note 33(g) of
the HTSUS, or goods entered under a tariff heading subject to
Proclamation 10908, as amended, based on the appropriate certification
by the importer of record that such parts will be used in automobile
production or repair activity in the United States.
``MHDV'' means articles that would be subject to duties
under Proclamation 10984 and classified under the subheadings of the
HTSUS that were established by that proclamation in U.S. note 38(b) of
subchapter III of chapter 99 of the HTSUS.
``Automobile'' means articles that would be subject to
duties under Proclamation 10908 and classified under the subheadings of
the HTSUS that were established by that proclamation in U.S. note 33(b)
of subchapter III of chapter 99 of the HTSUS. This definition includes
light-duty trucks classified in Class 1 and 2 with a gross vehicle
weight under 10,000 pounds.
``Aftertreatment system'' means the components that are
attached to an internal-combustion engine to reduce exhaust emissions.
``Turbocharger'' means a device utilized in an internal
combustion engine to compress the intake air and force more air into
the engine to produce more power. For the purposes of the core engine
components requirement, this includes superchargers.
B. Application Requirements
Manufacturers seeking an import adjustment offset amount must
submit the following documentation for each period for which an import
adjustment offset amount is sought. For MHDV engine manufacturers, this
requires submission of one set of documentation for the period of
November 1, 2025 through October 31, 2026; and separate sets of
documentation for each of the periods of November 1, 2026 through
October 31, 2027; November 1, 2027 through October 31, 2028; November
1, 2028 through October 31, 2029; and November 1, 2029 through October
31, 2030. For automobile engine manufacturers, this requires submission
of one set of documentation for each period of May 1, 2026 through
April 30, 2027; May 1, 2027 through April 30, 2028; May 1, 2028 through
April 30, 2029; and May 1, 2029 through April 30, 2030.
1. Production Forecast
a. For MHDV and automobile engines: The number of completed engines
projected to be produced in the United States by model and the plant
locations where the projected engines will undergo final production
during each reporting period. Engine manufacturers shall also describe
the U.S. manufacturing activities for each model at each plant
location. For the first two years of the program, engine manufacturer's
production forecast shall include only models where production relies
on two or more U.S. originating core engine components. Core engine
components are turbochargers and a subset of engine parts identified in
Table A.2 in the Appendix to Annex 4-B (Product-Specific Rules of
Origin) of the USMCA, specifically, heads, blocks, crankshafts,
pistons, and rods. For year three of the Engine Offset Process and any
subsequent years, engine manufacturer's production forecast shall only
include models where production relies on four or more U.S. originating
core engine components. A core engine component is considered to be
U.S.-originating if it has been substantially transformed in the United
States, i.e., has undergone processing in the United States which
results in an article having a fundamental change in form, appearance,
nature, or character from any imported article used in its production.
For purposes of this requirement, engine blocks and heads will also be
considered to be U.S. originating if they have undergone all or
substantially all machining in the United States. In its submission,
the engine manufacturer must provide a description of the machining
performed on any core engine components it claims to be U.S.
originating and the location where the machining occurred.
2. Engine Value
a. For MHDV and automobile engines: The aggregate value of all such
engines identified in the Production Forecast as eligible for an offset
assembled in the United States during each reporting period. Automobile
and MHDV manufacturers that produce their own engines must calculate
the aggregate value of those engines using a methodology consistent
with the method for calculating net cost set out in Chapter 4 of the
USMCA. Automobile and MHDV manufacturers that manufacture their own
engines and that receive offset for U.S. vehicle production under the
May 15 Notice are required under that program to deduct the value of
the engine contained in the automobiles or MHDVs in calculating the
aggregate value of the relevant MHDVs or automobiles. For such
manufacturers, the aggregate value of engines under the Engine Offset
Process may not exceed the value of engines used in calculating the
aggregate value of MHDVs or automobiles under the May 15 Notice. Engine
manufacturers that produce engines for sale to MHDV or automobile
manufacturers must
calculate the aggregate value of those engines using either a
methodology consistent with the method for calculating net cost set out
in Chapter 4 of the USMCA, or by using the forecasted sales price of
the engine when sold to the automobile or MHDV manufacturer.
b. Aftertreatment systems: The value of aftertreatment systems may
not be included in the aggregate value of engines under the Engine
Offset Process unless the aftertreatment systems are included as part
of the engine assembly process at an engine manufacturing facility. If
the aftertreatment system is incorporated as part of the automobile or
MHDV assembly process at the MHDV or automobile assembly facility, the
value of the aftertreatment system shall not be included in the Engine
Offset Process submission. Moreover, if the value of the aftertreatment
system was included as part of the aggregate value of an automobile or
MHDV in a submission under the May 15 Notice, the value of the
aftertreatment system shall not be included in the aggregate value of
the engine for purposes of the Engine Offset Process.
3. Prior Year Production and Vehicle Value
a. For MHDV and automobile engines: If a manufacturer received an
offset in the previous year, the manufacturer must provide the number
of completed engines produced in the United States in the previous
reporting period, the aggregate value of those engines, and a
description of the U.S. manufacturing activities for each engine model
at each plant location, including a description of and the location of
machining of any core engine components, if applicable. In providing
these figures, manufacturers must use the eligibility considerations
and value methodology used in the prior year's application.
4. Tariff Liability Estimate
a. For MHDV engines: Projected MHDVPs tariff liability under
clauses 1, 7, and 12 of Proclamation 10984, broken down by Proclamation
10984 tariff costs the manufacturer will incur directly and
Proclamation 10984 tariff costs the manufacturer's suppliers will
incur.
b. For Automobile engines: Projected automobile parts tariff
liability under Proclamation 10908 or under clause 12 of Proclamation
10984, broken down by tariff costs the manufacturer will incur directly
and tariff costs the manufacturer's suppliers will incur.
5. Offset Calculation
a. For MHDV and automobile engines: Requested total import
adjustment offset amount for each reporting period, including details
of how such amount was calculated.
6. Importers of Record
a. For MHDV and automobile engines: A list of authorized importers
of record eligible to decrement against the manufacturer's import
adjustment offset amount. This list must include the importer's
Importer of Record number and the amount of the import adjustment
offset amount allotted to each importer of record. Updates to this list
may be submitted electronically to Commerce at [email protected]. At
its discretion, Commerce may update this list at other times during the
duration of the Offset Process.
7. Certification
a. For MHDV and automobile engines: Each submission must include
the following certification, which must be completed, signed, and dated
by the time the application is submitted:
I, (PRINTED NAME AND TITLE), currently employed by (COMPANY
NAME), certify that I prepared or otherwise supervised the
preparation of the attached submission. I certify that the
submission is accurate and complete to the best of my knowledge. I
am aware that the claims made herein, and the substantiating
documentation, may be subject to audit by U.S. Customs and Border
Protection and/or the U.S. Department of Commerce. I am also aware
that U.S. law (including, but not limited to, 18 U.S.C. 1001)
imposes criminal sanctions on individuals who knowingly and
willfully make material false statements to the U.S. Government.
8. Additional Information
a. For MHDV and automobile engines: Any other information the
applicant feels is necessary to facilitate decision making.
C. Review and Approval Process
Commerce will review applications for completeness. Commerce may
request supplemental documentation or clarification. Approved
manufacturers will be notified in writing of approval and amount of
offset granted, and relevant import adjustment offset amount data,
including amounts and importer of record numbers, will be transmitted
by Commerce to CBP. CBP will administer the offset at the time of entry
summary filing and may request additional documentation to validate
entries.
D. Usage and Enforcement
Import Adjustment Offset amounts claimed at time of entry:
May be used only by approved importers associated with the
approved manufacturer;
May be applied only to reduce tariff liability incurred
under clauses 1, 7, or 12 of Proclamation 10984 or Proclamation 10908
on MHDV or automobile parts;
May not exceed the manufacturer's total tariff liability
on covered MHDVPs and automobile parts; and
May not be traded, sold, or transferred.
E. Oversight and Adjustments
Commerce will monitor manufacturer and importer compliance and
communicate information regarding noncompliance to CBP, where
appropriate. CBP or Commerce may exercise their authority to conduct
audits of claims in an application, and any supporting documentation,
to ensure compliance with these procedures. Failure to substantiate the
claims in the application, or not allowing CBP and/or Commerce to audit
the claims and supporting documentation may result in denial of an
application, or an adjustment to the amount of an offset previously
granted. If it is determined that inaccurate, incomplete, or false
information has been submitted, penalties may be imposed.
III. Paperwork Reduction Act Public Burden Statement
A Federal agency may not conduct or sponsor, and a person is not
required to respond to, nor shall a person be subject to a penalty for
failure to comply with an information collection subject to the
requirements of the Paperwork Reduction Act of 1995 unless the
information collection has a currently valid OMB Control Number. The
approved OMB Control Number for this information collection is 0625-
0283. Without this approval, we could not conduct this information
collection. Public reporting for this information collection is
estimated to be approximately 40 hours per response, including the time
for reviewing instructions, searching existing data sources, gathering
and maintaining the data needed, and completing and reviewing the
information collection. The estimated burden hours are within the
approved burden hour limits of this control number. All responses to
this information collection are voluntary. Send comments regarding this
burden estimate or any other aspect of this information collection,
including suggestions for reducing this burden to the International
Trade Administration
Paperwork Reduction Act Program: [email protected].
William Kimmitt,
Under Secretary for International Trade, United States Department of
Commerce.
[FR Doc. 2026-15280 Filed 7-28-26; 8:45 am]
BILLING CODE 3510-DR-P
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