Customs Reclassifies Some Cars as Trucks, Raises Fees

The Customs Service on Wednesday increased duties on most imported all-purpose vehicles tenfold, reclassifying many from passenger cars to trucks.

About 250,000 such vehicles were shipped into the United States last year, mostly from Japan, industry officials said.

Customs said that previously sports utility vehicles and most small vans were classified either as cars or trucks, depending on cargo-carrying capability and rear compartment amenities such as carpeting and decorative side panels. If classified as cars, they were assessed a duty of 2.5% of their value and as trucks, 25%.

Under the new ruling, vehicles designed for both cargo and passengers costing $12,000 and up will be classified as trucks, Customs ruled.

Millions in Duties

John Durant, director of Customs’ commercial ruling division, said in a statement: “To the extent that a vehicle is equally designed for the transport of goods and of persons, it cannot be classified as one that was principally designed for the transport of persons.”

There was no immediate comment from the Washington office of the Japan Automobile Manufacturers Assn.

Customs Deputy Commissioner Michael Lane said it was impossible to know precisely how many additional imports would fall under the truck classification, but it was likely to increase the duties by hundreds of millions of dollars a year.

Japan has imposed voluntary restraints on the number of cars it ships to the United States, but there are no curbs on the number of utility vehicles and vans. The higher duty on imported utility vehicles was imposed about 25 years ago as part of a trade war between the United States and Europe, and has remained in force.

Customs officials said their new ruling was prompted by a request by several Japanese firms, including Suzuki, Mazda and Isuzu, chief shippers of the vehicles to the U.S. market. U.S. makers of utility vehicles and vans supported the Customs action.

Suzuki, one of the major Japanese car makers, said that although the government’s ruling will not affect its business with the United States, the new ruling contradicts past U.S. policies on passenger vehicles.