Car Prices Could Go Up by $12,000 Thanks to Trump’s Tariffs
Starting today, the 25% tariff on car imports from Canada and Mexico is officially in place. It won’t affect consumers immediately, as car dealers still have vehicles in stock that were imported before the new rule. However, once those cars are sold, buyers will feel the impact when dealerships replenish their inventory with new, more expensive models.
Experts say the tariffs could raise prices by over $12,000 for some electric vehicles, and by around $9,000 for large SUVs and $8,000 for pickup trucks. This could lead to a decline in car sales, especially for vehicles with a high trade impact.
Patrick Anderson, CEO of Anderson Economic Group, believes this could result in some models being pulled from the market because they will no longer be profitable to sell in the U.S.
American brands like Ford and General Motors will also be affected, as many of their vehicles are made in Mexico and Canada. For example, the Ford Maverick pickup and the Mustang Mach-E electric SUV are produced in Mexico. Even Tesla will feel the pinch, as it sources 20% of its car parts from Mexico.
The tariffs won’t just increase the price of cars made in Canada and Mexico, but also those assembled in the U.S. with imported parts. This could add up to $3,000 to the cost of a car made in the U.S.
Many experts warn this could lead to a trade war with Canada and Mexico. The tariffs break trade agreements that Trump negotiated, which led U.S. manufacturers to open factories in those countries. Trade between the U.S. and its neighbors was worth $2.2 trillion last year, but this could start to decrease.
Consumers may soon feel the price hike when buying cars. If you’re thinking of purchasing, you might want to do so soon before the costs go up.
Have something to add? Let us know in the comments below!
