President Trump’s sweeping 25 percent tariffs on cars imported into the US will not affect classic cars 25 years old or more, according to the executive order issued on April 2 and coming into effect at midnight Washington DC time on that same day.
Page 10 of the order states: “On or after April 3, 2025, vehicles that are at least 25 years old at the time of entry will be fully exempt from the 25 percent tariff on imported passenger vehicles and light trucks, under heading 9903.94.04, regardless of origin, make or model.”
The US Customs and Border Protection agency currently applies a 2.5 percent duty to imported passenger cars, and this will remain in place for all cars. The 25 percent tariff will be added to the 2.5 percent duty for cars and light trucks under 25 years old. The 25-year exemption aligns with the long-standing rule that allows cars not originally manufactured for the American market to be imported into the US.
This is a great relief for the collector car world. We talked with several dealers and shipping agents ahead of the exemption announcement, all of whom were worried about the effect on the market that a 25 percent tariff would have. Martin Button, experienced shipping agent and global brand ambassador for CARS, said: “All of the classics that we bring in attract 2.5 percent duty, and if this is put up to 2.5 percent duty plus a 25 percent tariff, it’s going to completely kill the market.”
Dmitriy Shibarshin of West Coast Shipping had a similar view before April 2, saying: “It will definitely have an effect on business, although I think the people who are buying the more expensive vehicles will probably continue to do so, but maybe they wouldn’t sell them overseas.”
The UK’s Historic & Classic Vehicles Alliance (HCVA) was one of the first organisations to issue a statement about the tariffs, with its CEO Dale Keller telling Magneto that: “Historic vehicles and parts are by nature already built, classified and valued, and there is no ability to recreate them in the US. Applying a tariff on these vehicles and parts is therefore an unintended consequence of policy intended for a totally different set of objectives.”
Although the exemption for classic cars is a great relief, the situation is more difficult for new vehicle companies, including low-volume manufacturers such as Morgan, which export a high proportion of their cars to the US.
There are also still question marks over new parts for classic cars. Will it be possible to distinguish between new parts for old cars and new parts for new cars? It’s impossible to know at this stage – but tariffs on parts aren’t set to start until May 2025 or later.
It’s also worth noting that the 2.5 percent duty that’s been charged by US Customs and Border Protection for many years is significantly lower than that charged by most other countries for imports; most European countries charge ten percent plus low-rate VAT. This has long been a source of dissatisfaction for those exporting cars out of the US.
