Client Advisory: New Section 232 Tariff Caps on Taiwan Auto Parts, Lumber, and Aircraft Components

WHAT'S THE LATEST

On May 28, 2026, the International Trade Administration (ITA) and the Office of the United States Trade Representative (USTR) published a Federal Register notice implementing tariff commitments under the U.S.-Taiwan Memorandum of Understanding (MOU), signed January 15, 2026, pursuant to Executive Order 14346. The notice modifies the HTSUS to cap or eliminate Section 232 duties on three categories of Taiwan-origin goods.

RETROACTIVE EFFECTIVE DATE: Although published on May 28, all HTSUS modifications apply retroactively to entries on or after 12:01 a.m. ET, May 1, 2026. Importers who paid Section 232 duties at higher rates between

WHAT WE KNOW

Tariff Changes by Product Category

*Effective for entries on or after May 1, 2026

Automobile Parts (Passenger Vehicles & Light Trucks): 15% Total Cap

If Column 1 rate is 15% or higher, no Section 232 duty applies. If Column 1 rate is below 15%, Section 232 applies only to reach a combined 15% total.

New Chapter 99 Subheadings:

• 9903.94.66 (Col. 1 ≥ 15%)
• 9903.94.67 (Col. 1 < 15%)
• 9903.94.68 (USMCA, ≥ 15%)
• 9903.94.69 (USMCA, < 15%)

Timber, Lumber, & Wood Derivative Products: 15% Total Cap

Applies to Taiwan-origin wood products in U.S. Note 37(d) and (f). Same 15% combined-rate cap as auto parts.

New Chapter 99 Subheading:

• 9903.76.24
• Rate: 15% (General & Special)

Civil Aircraft Components: 232 Removed

Taiwan-origin civil aircraft components (non-military, non-UAV) qualifying under General Note 6 are exempt from derivative Section 232 tariffs on steel, aluminum, and copper.

New Chapter 99 Subheading:

• 9903.96.03
• Rate: No change (exempt)

Retroactivity & Refund Window

Because these changes are effective retroactively to May 1, importers that paid full Section 232 duties on qualifying Taiwan-origin auto parts, wood products, or aircraft components between May 1-28 may have overpaid.

Act promptly as protest deadlines are time-sensitive. Review all entries of Taiwan-origin goods in these categories during that window and work with your SEKO customs team or broker to assess refund eligibility under CBP's standard protest and refund procedures.

SEKO'S GUIDANCE

Our trade compliance team is actively reviewing the scope of these changes and their downstream classification implications. We recommend the following actions for importers with Taiwan-origin supply chains:

• Audit May entries. Identify all entries of Taiwan-origin auto parts, timber/lumber/wood products, and civil aircraft components on or after May 1. Compare duties paid against the new 15% cap (or 232 exemption for aircraft parts) and determine whether a refund protest is warranted.
• Review and update HTS classifications. Ensure correct tariff classification and proper use of new Chapter 99 provisions:
  • 9903.76.24
  • 9903.94.66-69
  • 9903.96.03
• Coordinate foreign trade zone (FTZ) inventory. If you operate under an FTZ, verify that Taiwan-origin auto parts admitted on or after May 1 are properly designated as privileged foreign status under 19 CFR 146.41 to preserve proper duty treatment.
• Monitor the U.S.-Taiwan ART agreement. The Agreement on Reciprocal Trade has been signed but is not yet in force. SEKO will issue a further advisory when implementation begins.
• Consider CBP Periodic Monthly Statement (PMS) enrollment. To manage duty payment cash flow under evolving tariff structures, consider enrolling in CBP's PMS program, which consolidates duty payments and can provide approximately 36 days of average payment terms.
• Engage SEKO for classification and compliance reviews. Our team can assist with HTS classification analysis, entry audits, and coordination with CBP on refund processing for the May 1-28 retroactive window.

SEKO's team will continue to monitor updates from CBP, ITA, and USTR as the U.S.-Taiwan trade framework develops and will provide timely advisories as additional information becomes available.

If you have questions, please contact your SEKO representative or email [email protected].