goods and service tax
Published on 8 April 2025
Tariff Code 7318 vs. 8714: Classifying Auto Parts in 2025
Legal Framework and Key Definitions
Picture this: Chapter 7318 covers workhorse items like screws, bolts, nuts, washers, and rivets made of iron or steel—think of them as the universal spare parts of industry. Chapter 8714, though, is strictly for parts and accessories meant for vehicles (headings 8711–8713). The rules get clearer with Section XV, Note 2(a), which pins "parts of general use" (like those 7318 items) as distinct from vehicle-specific gear. Section XVII, Note 2(b) drives this home by excluding general-use parts from vehicle classifications. But here’s the kicker: Section XVII, Note 3 demands classification based on principal use. If a part is designed "solely or principally" for vehicles, it belongs in 8714—no compromises.
How Classification Works
So how do you decide where a part fits? It boils down to two big tests. First, the Principal Use Test: Parts built exclusively for cars, like engine crankshafts, slide straight into 8714. Generic fasteners—say, standard bolts used in everything from furniture to farm equipment—stay put in 7318. Take a bolt customized for a specific car model using precise engineering specs: that’s a 8714 item.
Then there’s the Material vs. Function Tug-of-War. Even if a part (like a plastic hose) technically fits another chapter (e.g., Chapter 39), it defaults to 8708 if it’s a finished auto component. Courts have backed this repeatedly. Cases like G.S. Auto International Ltd. (2003) and Cast Metal Industries (2015) hammered home that parts made specifically for vehicles belong in Chapter 87—not the general-use bucket.
Recent Regulatory Updates (2025)
- Brace for impact: 2025’s rulebook packs some punches. Section 232 Tariffs slap a 25% duty on autos and select parts (like 8708 accessories) under codes such as 9903.94.05. But here’s the relief valve: USMCA-certified parts get a 0% duty (HTS 9903.94.06), while non-USMCA content still faces the full 25% hit.
On the upside, Domestic Content Incentives sweeten the deal. U.S. assemblers can claw back offsets—3.75% of a vehicle’s MSRP in 2025–2026—for using homegrown parts. This isn’t just paperwork; it’s real cash for playing by local rules.
Common Pitfalls and How to Dodge Them
Even seasoned pros trip up here. One classic blunder? Assuming all vehicle fasteners belong in 8714. Truth is, standard nuts and bolts used in cars—unless designed exclusively for them—still live in 7318. Another trap: Overlooking exclusions. Plastic gaskets or mountings might scream "auto part," but Section XVII notes boot them from 8708. Miss that, and you’re in for a compliance nightmare.