The Trump administration’s 25% tariff on foreign-made cars is set to take effect this week and in a weekend interview with NBC News, the president made clear his tariff threat is not a bluff, and has a long-range strategic objective.
“I couldn’t care less if they (automakers) raise prices, because people are going to start buying American cars,” Trump told NBC News.
But it might not be that simple. The Ford F-150 is built in Louisville, Ky., but if a significant number of parts are imported, it might not escape the tariffs. While some foreign automakers, such as Toyota, have assembly plants in the U.S., vehicles made here would be subject to some tariffs if many of the parts were made overseas.
Trump's stated purpose with the tariffs is to encourage U.S. automakers to bring all manufacturing to the U.S. to create jobs – a goal that may take some time to achieve. In the meantime, what are the effects on consumers who want to buy a new car?
Wide-ranging impact
“These newest tariffs will impact every global automaker, with European and Asian brands facing the largest cost increases, but even domestic automakers like Ford and General Motors are looking at substantial increases in the cost of components for vehicles assembled in the U.S.,” said Karl Brauer, executive analyst at iSeeCars.
A Toyota assembled in Indiana may be subject to the tariff, but the levy might be less than on a Toyota assembled and imported from Japan. In an analysis, iSeeCars projects that the tariffs will result in an increase of between $6,000 and $16,000 for cars and trucks sold in the U.S.
According to Cars.com, a total of 262 vehicle models available in the U.S. are produced outside the country and will face the maximum tariffs. Analysts at iSeeCars have provided this breakdown of how tariffs will affect prices consumers pay for vehicles, including domestic brands, that are not produced in the U.S:
Tariff Price Impact on Most Popular Cars in the US Not Produced Domestically – iSeeCars Study | |||
Model | Average New List Price | Price with Additional 25% | Additional Cost |
Chevrolet Silverado 1500 | $55,612 | $69,515 | $13,903 |
Ram 1500 | $60,380 | $75,475 | $15,095 |
Chevrolet Equinox | $33,208 | $41,510 | $8,302 |
Toyota Tacoma | $47,101 | $58,876 | $11,775 |
Nissan Rogue | $35,437 | $44,296 | $8,859 |
Toyota RAV4 | $35,764 | $44,704 | $8,941 |
Honda Civic | $28,437 | $35,547 | $7,109 |
Toyota Corolla | $25,371 | $31,714 | $6,343 |
Honda CR-V | $35,897 | $44,871 | $8,974 |
GMC Sierra 1500 | $62,394 | $77,993 | $15,599 |
Mazda CX-5 | $35,006 | $43,758 | $8,752 |
Jeep Compass | $31,633 | $39,542 | $7,908 |
Toyota 4Runner | $54,126 | $67,658 | $13,532 |
Nissan Sentra | $24,155 | $30,194 | $6,039 |
Hyundai Tucson | $34,472 | $43,090 | $8,618 |
Hyundai Elantra | $25,312 | $31,640 | $6,328 |
Honda HR-V | $29,658 | $37,072 | $7,414 |
Dodge Charger | $66,701 | $83,377 | $16,675 |
Subaru Forester | $37,124 | $46,405 | $9,281 |
Kia Sportage | $33,529 | $41,911 | $8,382 |
GMC Terrain | $35,188 | $43,985 | $8,797 |
Chrysler Pacifica | $47,105 | $58,881 | $11,776 |
Chevrolet Blazer | $42,691 | $53,364 | $10,673 |
Hyundai Sonata | $30,517 | $38,146 | $7,629 |
Average for all listed vehicles | $40,170 | $50,212 | $10,042 |
As the tariffs take effect, Brauer expects prices to also rise for used cars, especially late model years, since the same thing happened during the pandemic when supply chain issues reduced the number of new cars and trucks.
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