On July 28, 2026, the U.S. Department of Commerce (Commerce) published a federal notice stating that U.S. manufacturers of engines for cars and medium- and heavy-duty trucks (MHDVs) can now receive tariff offsets for sectoral duties on imported parts. The U.S. International Trade Administration said the new process sets rules similar to the offsets announced in May for vehicle makers that use imported parts.
Eligible engine manufacturers can claim an import adjustment offset equal to 3.75% of the total value of all engines they assemble in the U.S. Commerce will set that engine value each year.
For the first two years, only engines made with at least two U.S.-made “core engine components” will qualify. Core components include heads, blocks, crankshafts, pistons and rods, and, turbochargers. Starting in year three, engines must include at least four U.S.-made core components. Commerce stated a component counts as U.S.-origin if it is “substantially transformed” in the U.S. Howeer, engines that don’t meet this standard are classified as assembled through “limited production operations” and are ineligible for the offset.
For MHDV engines, the first year of the offset starts retroactively in November 2025. For automobile engines, it starts retroactively in May 2026. Unused offsets can be carried forward with no expiration.
To receive the offset, manufacturers must file annual documentation with Commerce, including a forecast of qualifying engines, the total value of those engines, the offset amount requested, and their importers of record. Commerce also set rules on when emissions aftertreatment systems can be included in the engine’s value.
The Husch Blackwell International Trade and Supply Chain team will continue to monitor this and provide updates as they become available. If you have any questions or concerns, please contact your Husch Blackwell attorney.