The long wait is finally over. My $258 Honda Life will be landing in America in just a few hours. Everything has gone swimmingly well until now, when my car just got hit by America’s 10 percent global tariff. That’s odd, but then I learned that other cars on the same ship also got hit by the tariff, while many other cars on the ship dodged the tariff. It’s all a huge headache, and nobody can seem to agree on exactly what’s going on.
The tariffs announced and levied by the Trump administration have put global trade on a rollercoaster ride. Some shippers have abandoned entire containers of goods in a panic, while the import car community initially had no real idea of what the final cost of their cars would be. None of this is helped by the fact that President Trump has been pulling the tariff levers forward and backward at seemingly random times, so it’s hard to know what tariffs are even applicable at any given time.
President Trump first announced 25 percent automobile and auto parts tariffs back in March, then eased the auto parts tariff later. When the tariffs were published on the White House’s Presidential Actions page, it didn’t seem to offer a carve-out for cars that are 25 years of age or older, or the age at which the federal government stops caring about whether the vehicles meet safety regulations. The EPA has a shorter 21-year rule, but that doesn’t help you much when the exempt equipment is bolted to a body that can’t enter until it’s 25.
The import community reeled, as getting hit with a 25 percent tariff is a huge deal. Let’s say you spent years saving up a bunch of cash to buy your dream Honda NSX. You find the car and, for the purposes of this scenario, it’s $50,000. Normally, this car would be subjected to a 2.5 percent duty, or just $1,250. If this car gets slapped with a 25 percent duty, it adds to the original 2.5 percent duty, racking up to 27.5 percent. That’s $13,750, and your $50,000 NSX is now a $63,750 NSX. That’s a whopper of a hit.
Trucks hit with a 25 percent tariff would see their duty increase to 50 percent due to the infamous Chicken Tax. At the very least, Kei trucks, the most common vintage trucks Americans import from Japan, are so cheap that even a 25 percent increase in cost doesn’t amount to much.
“Classics” Avoid The 25 Percent Tariff
Thankfully, when the auto tariff actually hit the Federal Register, the boring legalize included a carve-out for classic imported cars. Here’s the boring stuff:
A. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Daylight Time on April 3, 2025:
a. The following new note 33 to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) is inserted in numerical order:“33. (a) Except as provided for in headings 9903.94.02, 9903.94.03, and 9903.94.04, heading 9903.94.01 provides the ordinary customs duty treatment applicable to all entries of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks (hereinafter, automobiles) from all countries classifiable in the headings or subheadings enumerated in subdivision (b) of this note.
Heading 9903.94.01 says:
Except for 9903.94.02, 9903.94.03, and 9903.94.04, effective with respect to entries on or after April 3, 2025, passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks, as specified in note 33 to this subchapter, as provided for in subdivision (b) of U.S. note 33 to this subchapter.
Heading 9903.94.04 is what’s most important here, which states:
Heading 9903.94.04 applies to all entries of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks from all countries classifiable in the headings or subheadings enumerated in subdivision (b) of this note that were manufactured in a year at least 25 years prior to the year of the date of entry.
Enthusiasts began to breathe easier. Our 25+ year-old dream cars were safe. Or, at least, that’s what we thought.
My 1997 Honda Life, which I scored for just $258 in the Japanese auction system, departed Yokohama, Japan, aboard the MOL Clover Ace on April 21. I’ve been obsessing over roll-on, roll-off ships ever since and tracked the Clover Ace as she sailed to Panama, snaked her way through the canal, and made headway for the American East Coast.
Schrödinger’s Tariff
It has been a long wait, but I started seeing some action last week when I got an arrival notice from my shipping line and the Customs paperwork invoice from my Customs broker, All Ways International Shipping (AWIS). Everything looked great until I checked out the invoice from AWIS. The Customs duty was $32.25. Huh, that’s weird, I expected to pay 2.5 percent, or just $6.45. Based on my calculation, I was paying 12.5 percent. What gives?
I reached out to AWIS and was given a breakdown, which noted that my car was subject to an additional 10 percent duty. When I asked about that, I was told, “Because your vehicle was not manufactured in the US, there is an additional 10% duty on top of the standard 2.5% rate.” But what does this mean?
AWIS is referring to the Trump administration’s 10 percent global tariff, which hits the imports of all countries with a minimum additional duty of 10 percent. From the White House:
President Trump is invoking his authority under the International Emergency Economic Powers Act of 1977 (IEEPA) to address the national emergency posed by the large and persistent trade deficit that is driven by the absence of reciprocity in our trade relationships and other harmful policies like currency manipulation and exorbitant value-added taxes (VAT) perpetuated by other countries.
Using his IEEPA authority, President Trump will impose a 10% tariff on all countries.
This will take effect April 5, 2025 at 12:01 a.m. EDT.
I wasn’t alone in getting hit by the 10 percent tariff. Another enthusiast in a private JDM group that I’m in has a car on the Clover Ace, and he got hit by the 10 percent tariff. It was a similar deal for someone else with a car on the Clover Ace.
But then it gets weird. Dealership and importer Car Shop Midori had 14 cars aboard the Clover Ace and claimed to have paid just the 2.5 percent duty on each vehicle. Dylan Cain, the operator of the Import Guys, recently cleared 22 cars at the 2.5 percent rate. The Autopian spoke with another enthusiast who just imported an expensive, over 25-year-old classic from Europe and took delivery this week. This person only paid the usual 2.5 percent duty.
So, all of this is madness. Lots of people are paying the normal 2.5 percent duty, while many others are getting hit with the 10 percent tariff, to hit a total of 12.5 percent duty.
Some importers in the private JDM group I’m in claim it’s based on when your vehicle was loaded, saying that the 10 percent tariff would hit vehicles loaded onto a ship after the April 5 deadline above. But this doesn’t explain what’s happening here because the Clover Ace wasn’t loaded until about April 20 and didn’t leave until April 21, yet, only some cars on this ship have gotten the 10 percent tariff.
Other importers are pointing to the Harmonized Tariff Schedule codes being used to clear cars. The belief is that HTS 9903.01.33 should be the code chosen, which states:
Articles of iron or steel, derivative articles of iron or steel, articles of aluminum, derivative articles of aluminum, passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks and parts of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks, of any country, as provided in subdivision (v)(vi) through (v)(xi) of note 2 to this subchapter.
Since 25-year-old cars are exempt from the 25 percent tariff, that would mean the normal 2.5 percent. People getting hit with the 10 percent tariff are seeing HTS 9903.01.25, which says:
Articles the product of any country, except for products described in headings 9903.01.26–9903.01.33, and except as provided for in heading 9903.01.34, as provided for in subdivision (v) of U.S. note 2 to this subchapter.
This is the heading for the 10 percent global tariff. Some importers in the American JDM community are saying 2.5 percent is proper, while others are saying the additional 10 percent is actually the proper code. It’ll make your head spin. Not helping things is how Customs is clearing vintage imports with either code applied.
You Can Help Yourself
I decided not to fight over the 10 percent charge to my car, as it amounts to just $25. Honestly, I don’t blame AWIS here because this whole situation has been a dumpster fire. Also, as importers point out, it’s not the brokers that are charging you for duties, but Customs.
Unfortunately, if this confusion continues, it’s going to bring just another headache to import enthusiasts. If you’re like me and you just pick a broker you’ve worked with in the past, you may not know if you have to pay 2.5 percent or 12.5 percent until you’re hit with the bill, which sucks. Thankfully, there is something you can do about it. Before you choose a broker, ask them what they expect your import duty to be. Several brokers are now advertising that their cars are getting hit by the 2.5 percent duty rather than the 10 percent duty.
Tariffs aside, I cannot wait to pick my little car up. I’ve been so excited that I’ve even lost sleep from the energy going through me right now. I get to drive a cool truck on a fun road trip to pick up a cool car. What a great way to start off the summer. Importing a car is something I recommend all enthusiasts do at least once in their lives, and despite everything, I still recommend it now, too.
(Update: Added a clarification about the 25-year rule.)
(Topshot: Japan Car Direct/Autopian.)
Since we were told that consumers would never have to pay for tariffs, I assume next year you can deduct that $25 from your taxes. Then again, I’ve heard that smart people don’t pay taxes. Eager to read about your car.
Thanks for calling me smart :).
You say rollercoaster of tariffs, I say he pumps/dumps the market to basically print money. He can tell his friends which tweets are real, or how to intrepret all his insane ramblings, that way it isn’t ‘insider trading’.
Elon did the exact same thing with TSLA from 2013-2022, and yeah, I made a lot of money, but that was ONE STOCK, not the entire market. 45 is literally making the entire market a meme stock.
Yeah, that makes sense but it’s still BS. At least it wasn’t much. So glad that you can finally get the car…I absolutely love the car and the color. It will be so fun to get and I’m excited for you! Looking forward to the updates
Luckily its cheap but its a great example of how confusing and poorly done this all has been. But thats par for the course lately…
Oh well it’s only $25. Customs duties never make sense. Last year before the tarriffs, I bought a set of 4 new wheels from Japan. They came in 2 boxes and were all identical. 2 cleared customs in one day with no duty. 2 were hung up in customs for weeks, needed additional paperwork and I had to pay $18 duty. Customs never makes sense, you will go crazy trying to make sense of it. Just be glad you got your car.
Your car was never responsible for the tariffs it seems someone your importer or someone else is tacking on fees for greater profit. See who is importing for the 2.5% and who is tacking on the BS fee and report back.
Nah, lots of places sell you a car in japan with shipping to a port. So you get the benefit of picking up at a local port they get the benefit of never doing business in america with 50+ sets of laws to worry about.
I know this seems like a simple thing to fix and determine. But it’s not. Story time. I once was importing IPE decking into Canada and had to figure out the what code to use when crossing the border from USA to Canada. Well, this was 20+ years ago when IPE was not a common import.
I spent hours going over the list of codes trying to figure out which one to use. There were so many conflicting codes that might apply to my import. I chose one and when the truck (carrying only my wood) was crossing the border, the agents were not sure I was using the right code. A huddle discussion occurred and they eventually decided on some different code to use.
It did not impact my duties but the agents took doing things correctly very, very seriously. It took nearly an hour for them to settle on the proper code – it likely involved calls to head office in Ottawa. They were not annoyed or angry with the code I provided.
They were honestly really nice and cool about everything. It was as much to protect me (the named importer) from any issues. You can get into a LOT of serious criminal record offences including go to jail offences for mislabeling an import – whether accidentally or on purpose.
The 2.5% versus 12.5% duty is 100% because the cars are using different import codes. When the boat arrives, customs uses whatever code you provide for importation. Some items will get randomly checked to see if the import forms actually match what is actually being imported. If customs does not agree with the code used, then expect issues.
Personally, I would not risk using the code getting 2.5% duties unless I got written confirmation from customs to use the code. Saying someone else got their car imported with the code you provided does not get you off the hook. It actually makes you look like you are trying to scam customs from a higher duty. Which is a federal offence.
Many government sites that have drop-down menus are missing accurate description and some options. I used the IRS free tax website and it forced my answers but I was told I was getting 9k back. I knew it was wrong and I didn’t get the 9k but a message my answers that I was forced to give to continue were not accurate fax, yes fax, a form to show and figure accurate numbers. Funny I didn’t have to enter any W4 information it was on there. Apparently they had the 1050 form to but could not use it I had to enter it. Government does nothing right.
Running a government is genuinely hard. With import customs, their customers have also changed drastically. In the past, individuals were rarely or ever importing things on their own. Everything with customs was built with the assumption that a business was doing the importing.
This then gave rise to import brokers for smaller businesses to provide the expertise to import. And now you have cut rate import brokers that offer absolutely no expertise and blindly use whatever code you provide. I’m sure there are import brokers that know the correct code to use, but folks probably are unwilling to pay the fees they charge. Expertise is something you have to pay for – but individuals often use the cheapest broker so they get what they pay for. Which is a mess of different duties being paid for the same item.
In a rather ironic twist, the thousands and thousands of import codes is a result of the use of tariffs and import restrictions imposed over at least the last 100 years. The bureaucratic mess is because governments used to impose tariffs on all sorts of goods at various rates. It is painful to watch the world tipping into a possible world of tariffs again. Tariffs do not reduce government bureaucracy and waste – they actually increase it. They also increase the costs to companies to try and navigate the complexity of said tariffs.
Having worked on a few of these sorts of systems I can back up your statements. They are a nightmare of nightmares to spec and set requirements for.
I’ve got five cars on that boat, be sure to look for my darling Atrai when you’re there! Regrettably, I’m out of town and need carriers to pick them up for me.
Been tracking new Golf Rs, was going to wait a couple years but the tariffs are pushing me sooner. Sounds like VW got a bunch into port before the tariffs took effect on April 5 or something like that, so maybe last chance to snag one before a $10K+ price increase, but maybe they already got tariffed at 27.5%… Is the tariff determined by the rate at date it’s unloaded, date it leaves the port, or some other date?
Generally it is the the date it clears customs. Some automakers have been holding cars in lots at the port instead of processing them through customs.
Price increases will depend on the automaker’s pricing strategy. I expect most automakers to spread their tariff costs across all models not just the imported ones. (Subaru just did that when they announced their upcoming price increases)
At last, an article that really hits home when it comes to showing the impact tariffs have one someone trying to… get a Life.
I’ll show myself out.
And congrats, Mercedes – Can’t wait to see more about this car!
Oh man, with jokes like that, better not try your hand at standup! Oh wait…
Thursday night… VB Funny Bone. That joke will NOT make an appearance.
It is an unalienable right, after all.
The NHTSA stops caring about safety at 25 years but the EPA stops caring about emissions at 21 years.
Either way, I’m sorry to hear about the additional ten percent.
Very true! The EPA rule is shorter, but it’s still functionally a 25-year rule in the end because your 21-year exempt emissions equipment is still attached to a body that can’t enter until 25. Ah, regulations!
I have to wonder whether there are, or at least have been, NHTSA-compliant vehicles lacking EPA approval that are (or were) eligible to be brought in “early.” My guess is that it’s unlikely for the current crop of vehicles in that window but perhaps more likely to have been true earlier in the history of those rules.
Less than a cup of coffee at Starbucks. Not a bad thing. Heck 100% and you still qualify for a Gambler 500 car. I still say your importer is trying to make more money
I’m confused how the importer is trying to make more money? They have to give 100% of the duty collected to the US government. How are they making more money?
If anything, they may actually be making less money net as they have to pay electronic payment fees for the $32 which are % of the amount paid once they get over a certain dollar amount.
To be clear here, there is no importer company involved. I used an auction agent to buy the car, and they handled the export out of Japan. Once the car was on the boat, responsibility was handed off to me. I hired AWIS to handle customs entry.
Blahx3 (ha) is correct that the duties go straight to the feds. AWIS charged me a separate flat rate to use its service.
Besides, skimming $25 off someone who identified themselves in correspondence as a car journalist probably wouldn’t be a wise move. But yeah, as others noted, it’s better to pay too much than too little, so I’m not going to cry over $25. 🙂
Ok. I genuinely like the Blahx3 joke. Thanks for the laugh!
Shouldn’t it be blah41x3
Groan!!! Well play, very well played! 🙂
Customs codes are fairly subjective as there are thousands and most brokers don’t really look that hard. Just about every time I’ve imported something I’ve had to look up the codes and found they suggested something that wasn’t quite right and there was a a description that fit better with a lower rate.
One would think common sense would dictate the additional tariffs wouldn’t apply to vehicles below a certain threshold, especially ones with a selling price less than $300.
Oh. Wait. Never mind, I was trying to use common sense.
The loophole for items under a certain dollar amount was closed a few weeks ago.
Because we gotta keep Billionaires happy.
You’re right. They know what’s best for us, and will fight diligently to protect our* interests.
*their
I learned earlier this week that the de minimis loophole is only closed for China! But it’s most likely to spread to other countries once CBP has the mechanisms in place to collect all these tax dollars.
You mean Japan isn’t the same as China?
They look the same to me…
/sarc
Don’t give Xi Jinping any ideas 😉
Yep – just on Greater China. I buy old Seiko watches from Japan somewhat regularly (also known as “too often” per my wife) and everyone knows to keep total shipments under $800, which still applies. My guess is Mercedes’ Honda Life (even if it is tiny by car standards) is still too big to fall under the second part of de minimis laws – small parcels.
Yeah, common sense isn’t so common anymore…neither is sense
Love living day to day on the whims of somebody who is both obsessed with tariffs and also has no idea how they work or what they do.
Replace “tariffs” with “literally anything in the universe” and you have it covered.
It’s a total fustercluck with tariff luck on a Kei truck. Then the registration station calls for ablation of your small ride from another nation.
It’s no longer easy, peasy, japanesey for the Kei crowd.
I can’t wait to hear about your first impressions of the new ride!
It’s the importer of record’s responsibility to determine the correct HTS code for an import, even though in lots of situations the importer will leave it up to their customs broker. What I imagine has happened here is that some brokers have either
a) followed the precautionary principle and avoiding choosing the lower of two duty rates, since customs will rarely complain if you pay them too much; or
b) either didn’t read the new notes properly, or didn’t realise that the car was old enough to qualify.
If you tell a broker to use a specific HTS code, they will. And it is usually in the importer’s benefit to check what their broker is doing.
I wish someone had told me this years ago. It’s been three times now where I’ve just passed it off to a Customs broker or import service, who say/advertise that they’ll take care of everything. Well, when I do this again, I now know about HTS codes!
But yes, it also does appear that some brokers are erring on paying the higher duty rate. I mean, in my case, the higher rate is just $25, so no big deal.
For the guys who paid the lower rate despite the load date, is it possible those were moved to a bonded warehouse before they were loaded?
It’s been a long time since I dealt with these things and we never really used bonded warehouses, but dealt with importers who did.
Welcome to the chaos – and to paying for Billionaire Tax Breaks
Just wait till all those tax breaks trickle down to the rest of us! We’ll be rich!
Thanks for the reminder, Ronald!
Yeah… There’s only one thing that trickles down.
And it isn’t money…
Somebody should start selling T-shirts with “Nobody Seems to Know What’s Going On” printed on them. It’s a perfect motto for our current dystopian timeline.Awesome your car is finally safe and sound Stateside!
Next battle: making sure Illinois lets you register it.
Weirdly enough, I’m not too worried about registration. There are still ways to register vehicles in more friendly jurisdictions. Much of my fleet used to wear Vermont plates! But the fight is absolutely still worth it because you should be able to drive your little car in your state without being harassed over it. 🙂
My understanding is that a vehicle is legally registered/plated in a state, it can be driven in any other state legally, no matter what the current states law says about titling/registration. Thats why the Montana LLC thing works for people (for now anyway).
Some (many?) states do have statutes declaring that if a vehicle is kept in a state by a resident of that state it needs to be registered in that state. It’s rarely (if ever?) enforced but absolutely something that could happen, don’t piss off the neighbors…
I mean technically everyone could just register their car in whichever state has the lowest registration rates and no emissions checks, right?
If I had most of my cars registered in a different state for years I wouldn’t be talking about it on a public website.
I’ve seen laws like this enforced in DC, and occasionally in MD.
States with egregious car taxes like Mississippi care about your plates.
I sold a Blazer to my brother-in-law from Mexico 20 years ago. I was there in December and that thing was still rocking Arkansas tags. No tickets, no nada. Apparently, in Mexico a US tag is like an antique tag in the US.
This. I actually was contacted by the State of Virginia when I was working a temporary 3 month assignment there and was driving vehicles with Michigan plates. Not sure who reported me.
Then there is the insurance. Insurance companies don’t take kindly to people claiming an address for insurance different than where they actually live. That is insurance fraud and can leave you paying any claims out of pocket.
I got it enforced on me while living in California. When I was driving my recently-driven-from Washington ’67 VW squareback in CA I got stopped for speeding. I was told I had 10 days from when it entered the state to reregister it in CA. After promising I would, I was only cited for speeding. This was probably in the late 80’s.
IANAL and this is coming from only my own recall, so take with some grains of salt.
In CA, cars need to be plated in the state after a certain period of time. One workaround if you happen to have a non-CA plated car in the state is that cars can be brought in from out of state temporarily to get work done at a specialty shop. I’m confident that I could argue pretty persuasively that having work done on the rally car would require a specialty shop.
Federal law says your residence is where you declare it is, and, as normal, federal law overrides almost every single law in California.
You must be consistent about this.
Check with RV full timers about the finer points in this area.
Easier if you are keeping paperwork in the same state.
The hard part in some states is titling it to the owner.
Transfers after not are not the same nightmare.
So registering it in a normal state can allow an easy transfer to, oh let’s say, a deadend drive-in like Illinois.
Back when I drove for Hostess many of our trucks carried Illinois plates but never went there. Here in southwest Minnesota Next Era Energy AKA Florida Power & Light has a fleet of trucks licensed in Indiana.
Most freight companies tractors and trailers are tagged Indiana. There absolutely must be some advantage specific to there.
looked it up. Much lower registration taxes, and the ability to get corporate designed plates for free.
I don’t think Illinois is going to present too many problems, to be honest. We have all kinds of crazy stuff registered here. I would think insurance might be more difficult.