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Section 232 Tariff and Japan Car Import Costs in 2026 — What the 25% Actually Hits

Published 2026-08-14 ・ 23 min read ・ Japan Vehicle Data

Section 232 imposed a 25% tariff on all imported passenger vehicles effective April 3, 2025. That headline gets repeated constantly. What almost nobody explains is the carve-out that matters most to buyers of Japanese domestic market vehicles: vehicles manufactured 25 or more years before the year of entry are fully exempt from the Section 232 duty.

That one sentence changes the landed cost calculation entirely depending on what you are buying — and getting it wrong in either direction is expensive.

This article sets out what the tariff actually says, what it actually hits, and what landing a JDM vehicle in the US actually costs in 2026. The worked examples use the JB23 Jimny — one of the most actively imported JDM vehicles — but the framework applies to any eligible import.

Regulatory updates — July 24, 2026 and post-publication

Two regulatory events occurred after this article was first published (2026-08-14) that are relevant to vehicle importers:

Section 122 surcharge expiry (July 24, 2026). A 10% ad valorem surcharge was imposed globally under Section 122 of the Trade Act of 1974, effective February 24, 2026, for a hard statutory term of 150 days. It expired at 12:01 a.m. ET on July 24, 2026. Importantly, vehicles already subject to Section 232 auto tariffs were explicitly excluded from the Section 122 surcharge — the anti-stacking exemption covered the national-security auto tariff. Sub-25-year vehicles under Section 232 did not face a combined 37.5% rate during the Section 122 period. The rate table in §2 below (27.5% for non-exempt vehicles from most countries, 2.5% for 25-year-exempt vehicles) reflects the position that applied throughout.

Section 301 tariffs applied to Japan (July 24, 2026). Effective the same moment Section 122 expired, USTR imposed new Section 301 forced-labour investigation duties on approximately 60 economies, including Japan, under 91 FR 47318. The general Japan rate is 12.5% net of MFN for affected goods. However, vehicles and parts already subject to Section 232 auto tariffs are explicitly excluded from Section 301 — the same anti-stacking principle that applied under IEEPA reciprocal tariffs. Car importers covered by Section 232 are not affected by Section 301. Note also that Japanese vehicles are separately subject to a 15% combined rate cap under the US-Japan Framework Agreement (effective September 16, 2025 for autos); see §2 for the Japan-specific rate structure.

Article updated 2026-08-22 to reflect the Section 122 surcharge expiry (July 24, 2026) and Section 301 application to Japan (July 24, 2026).

1. What Section 232 Is

Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) authorises the President to restrict imports that the Secretary of Commerce determines threaten to impair US national security. The automobile tariff originated from a Commerce Department investigation opened in 2018 and finalised in 2019.

Presidential Proclamation 10908, signed 26 March 2025, directed a 25% ad valorem tariff on imported passenger vehicles and light trucks, taking effect at 12:01 a.m. Eastern Time on 3 April 2025. The Federal Register notice is at 90 FR 14705 (3 April 2025).

The tariff applies to vehicles classified under HTSUS Chapter 87 subheadings covering passenger cars (8703.22.01, 8703.23.01, 8703.24.01, 8703.31.01, and others). Covered vehicles enter under new HTSUS subheading 9903.94.01 and pay the 25% duty.

Phase 2 — auto parts. Separately, beginning 3 May 2025, certain automobile parts were added under HTSUS 9903.94.05, also at 25%. Parts tariffs are a different analysis and not the focus here.

2. The 25-Year Exemption — HTS 9903.94.04

This is the provision that changes the analysis for most JDM importers.

Proclamation 10908 explicitly excludes from the Section 232 tariff: “passenger automobiles and light trucks manufactured at least 25 years prior to the year of the date of entry.”

Those vehicles enter under HTSUS subheading 9903.94.04, which carries a 0% Section 232 rate. The standard 2.5% MFN (most-favoured-nation) base duty still applies, but the 25% Section 232 surcharge does not.

The practical result:

Vehicle age at US entrySection 232 dutyMFN base dutyCombined customs duty
Manufactured 25+ years before entry year0% (HTS 9903.94.04)2.5%2.5%
Manufactured fewer than 25 years before entry year (most countries)25% (HTS 9903.94.01)2.5%27.5%
Manufactured fewer than 25 years before entry year (Japan only)Supplemental to 15% cap (HTS 9903.94.41)2.5%15% (US-Japan Framework Agreement, effective September 16, 2025)

Note on Section 122 (February 24 – July 24, 2026): During the Section 122 global surcharge period, vehicles subject to Section 232 auto tariffs were excluded from the 10% Section 122 surcharge. The rates above applied throughout — the Section 122 surcharge did not stack on top of Section 232 auto duties.

For calendar year 2026, the cutoff is manufacture in 2001 or earlier. A vehicle built in December 2001 and entered in 2026 qualifies. A vehicle built in January 2002 does not.

This is a manufacture-date test, not a model-year test. The date that counts is stamped on the door jamb or chassis plate — the actual production month and year. Model year 2001 vehicles built in calendar year 2001 qualify; the same model year built in late 2000 also qualifies. See our article on how the 25-year rule works by manufacture month for the month-specific mechanics.

Used vehicles are covered

Section 232 covers used vehicles, not just new ones. The 25-year exemption applies equally to used imports. Without the correct HTS 9903.94.04 classification, the entry may be assessed the 25% rate even on an eligible vehicle — classifying correctly on CBP Form 7501 is the importer’s responsibility.

Anti-stacking: Section 232 takes precedence

An Executive Order issued 29 April 2025 confirmed that where both Section 232 automobile tariffs and IEEPA reciprocal tariffs apply, they do not stack — Section 232 takes precedence. Vehicles subject to Section 232 are excluded from the reciprocal tariff regime.

3. What the Tariff Is Calculated On

US customs duties are assessed on entered value (also called transaction value or customs value), defined under 19 U.S.C. § 1401a as the price actually paid or payable for the merchandise when sold for export to the United States.

For JDM vehicle imports, entered value is typically the purchase price of the vehicle in Japan — broadly equivalent to FOB Japan, not CIF. Ocean freight and marine insurance are generally excluded from entered value. CBP applies independent appraisal when declared values appear materially below market; for JDM vehicles with verifiable auction sheets, the auction hammer price is the natural starting point for declared value.

This matters for the cost calculation because:

Caveat: CBP valuation rules are complex and freight-related costs may or may not be included depending on terms of sale. Confirm value basis with a licensed customs broker before shipping.

4. The MFN Tariff and MPF

Even with Section 232 exempted, two mandatory fees remain on every import:

MFN base duty: 2.5% Applies to passenger cars regardless of Section 232 status. This is the standard Column 1 General rate under HTSUS 8703. Japan has permanent normal trade relations (NTR) status, so Column 1 General applies.

Merchandise Processing Fee (MPF): 0.3464% of entered value, minimum $32.71, maximum $634.62 (rates as of October 2024; confirm current figures with CBP or your broker). This is a CBP processing charge on every formal entry.

Harbor Maintenance Fee (HMF): 0.125% of entered value. Applies to commercial imports arriving by sea.

These three are the baseline for any passenger vehicle import, regardless of Section 232 status.

5. Worked Cost Examples

Example A — JB23 Jimny W4 (2000 model year, eligible)

The JB23 Jimny was produced from 1998 to 2018. Units manufactured through 2001 are eligible for import under the 25-year rule and qualify for the Section 232 exemption under HTS 9903.94.04.

Japanese auction price context (collected August 2026): good-condition JB23 examples (grade 3.5–4, under 80,000 km) trade in the ¥500,000–¥900,000 range at domestic auction. The USS monthly index showed an average hammer price of ¥1,315,000 across all vehicles in June 2026; kei-class vehicles like the JB23 trade well below the all-vehicle average.

Assumptions for this example:

Cost elementYenUSD (approx)Notes
Hammer price¥650,000$4,194Auction result
Auction fees¥55,000–¥80,000$355–$516USS and buyer commission; varies by auction house
Japan inland transport to port¥20,000–¥40,000$129–$258Yokohama or Kobe
Japan export agent / documentation¥30,000–¥50,000$194–$323Deregistration, export certificate
Japan-side subtotal~¥820,000~$5,290FOB Japan equivalent
Ocean freight (Ro-Ro, Japan → LA)—$900–$1,500Ro-Ro; container adds ~$1,500–$2,000
Marine insurance—$53–$1061–2% of vehicle value
CIF value (approx)—~$6,400–$6,900
US customs duty: 2.5% MFN on ~$5,290—$132Applied to entered value (ex-freight)
Section 232 duty—$0HTS 9903.94.04 — manufacture year ≤2001, exempt
MPF: 0.3464% on ~$5,290—$33 (min $32.71 applies)
HMF: 0.125% on ~$5,290—$7
Customs bond—$150–$300Required for formal entry
Customs brokerage—$400–$600Licensed broker fee
US port fees and drayage—$300–$600Port processing, inland delivery
Estimated US landing total—$7,700–$9,100Before any state registration, inspection

Takeaway: For an eligible JB23 (2001 or earlier), Section 232 does not change the cost equation. The total duty burden on the vehicle purchase price is 2.5% MFN plus mandatory fees, the same as before April 2025. The 25% Section 232 tariff is a non-event for this buyer.

Example B — 2003 JB23 (not eligible — hypothetical illustration)

A 2003 JB23 cannot be legally imported under the 25-year rule until 2028, so this scenario does not apply today. It is presented solely to show what the cost difference would look like if a non-exempt vehicle were compared.

On the same ¥650,000 hammer price:

The tariff penalty on a vehicle at this price point is approximately $1,300. On higher-value vehicles the difference scales proportionally — a ¥2,000,000 ($12,900) non-exempt vehicle would see roughly $3,225 in Section 232 duty alone.

Note: This scenario is presented for illustration only. Importing a sub-25-year JDM vehicle without meeting FMVSS/EPA compliance requirements is illegal. Do not attempt it.

6. What Changes the Calculation

Exchange rate. The yen/dollar rate shifts everything. The examples above use ¥155/USD; at ¥140/USD the same ¥650,000 hammer price becomes $4,643 (a 10.7% increase). For buyers in countries other than the US, the relevant exchange rate is their own currency versus yen. See the Japan export price by country article for the Ministry of Finance FOB price data that puts individual quotes in context.

Destination port. West Coast (Los Angeles, Long Beach, Portland) is cheapest from Japan. East Coast (Baltimore, Newark, Jacksonville) adds $800–$1,500 in ocean freight due to the Panama Canal routing. Gulf Coast ports (Houston) run similarly.

Ro-Ro versus container. Ro-Ro is cheaper ($900–$1,500) but exposes the vehicle. Container shipping ($2,500–$3,500 for a single-vehicle 20ft) is preferred for clean, collectable examples. Consolidated container (shared) can bring per-vehicle cost down to $1,500–$2,000 if timing aligns.

Auction fees. Japanese auction fees are not trivial. USS charges a buyer’s premium that varies by hammer price bracket, plus administrative fees. At a ¥650,000 hammer price, total fees to the auction house alone typically run ¥55,000–¥80,000. Exporters also charge their own margin on top. The auction price research guide covers what you can and cannot see from outside the auction system.

Customs broker. A licensed US customs broker is not optional for vehicle imports — CBP requires formal entry for commercial imports. Budget $400–$700 for brokerage. The broker handles Form 7501 classification, which must correctly assign HTS 9903.94.04 for exempt vehicles.

7. Comparison — Other Destination Countries

The 25% Section 232 tariff is a US-specific measure. Buyers in other major JDM import markets face different duty structures:

Country25-year rule equivalentImport duty on eligible JDMNotes
USA25 years from manufacture date2.5% (Section 232 exempt)Section 232 is the dominant policy change of 2025
Canada15 years~6.1% (MFN)No Section 232 equivalent; CUSMA does not apply to JDM
AustraliaNone (import any age)5%No age restriction; GST (10%) additional
UKNone for registered6.5% MFNPlus 20% VAT; import at any age
New ZealandNone0% (FTA with Japan)Japan-NZ EPA; no age restriction

For buyers in Canada, Australia, New Zealand, and the UK, Section 232 is irrelevant — the US tariff change does not affect their landed cost. It does, however, affect the competitive dynamics: US buyers who might otherwise have been competitors in the JDM auction market for sub-25-year vehicles are now priced out of that segment, which may modestly reduce competition for specific chassis. For 25-year-eligible vehicles, the competition does not change because US buyers always faced the same 2.5% rate.

8. What This Means in Practice

If you are importing a 25-year-eligible JDM vehicle to the US: Section 232 does not affect you. Your customs duty is 2.5% MFN on entered value, plus MPF and HMF. The proclamation explicitly exempts your vehicle under HTS 9903.94.04.

What you do need to verify:

If you are importing a newer JDM vehicle that requires compliance modification: The 25% Section 232 tariff is one of several cost barriers. FMVSS/EPA compliance modifications for sub-25-year vehicles typically run $10,000–$30,000+ depending on model. The duty on top makes the economics of non-exempt imports difficult for most buyers. This is not a JDM-specific finding — it applies to any imported passenger vehicle under 25 years old from any country.

For auction price research before bidding: The USS monthly auction index gives you the market direction. For individual chassis context, the auction price research guide covers what free tools show and where their limits are. Exporter platforms like BE FORWARD and SBT Japan offer retail-level pricing that reflects their margin over the auction floor.

Method and Limits

Primary sources consulted for this article:

The Federal Register notice at 90 FR 14705 (Proclamation 10908, 3 April 2025) was not directly retrievable — the Federal Register website returned a redirect to an unblock service when accessed on 14 August 2026. This is an unresolved access failure, noted as such.

The key regulatory facts — Proclamation 10908, effective date 3 April 2025, 25% rate, HTS 9903.94.04 exemption for 25+ year vehicles, anti-stacking Executive Order of 29 April 2025, and 90 FR 14705 citation — were confirmed across multiple secondary sources including a customs law firm analysis, a freight forwarder compliance bulletin, and CBP-referenced import guides. The specific regulatory text is stated in those sources as quoting or summarising the proclamation directly.

Limits this article cannot resolve:

N = multiple secondary sources, cross-checked. No direct access to CBP FAQ page (HTTP 403), no direct access to Federal Register (redirect). Original research collected 14 August 2026. Article updated 2026-08-22 to reflect Section 122 tariff expiry (July 24, 2026) and Section 301 application to Japan (July 24, 2026).

Sources

Section 232 — regulatory basis and scope:

Import costs and process:

Market prices:

Post-publication regulatory updates (added 2026-08-22):

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