New Study Forecasts How Softened Tariffs Will Affect Car Prices
A new study by the Michigan-based Anderson Economic Group (AEG) predicts that President Trump’s adjusted tariffs, amended on April 29, won’t stop car prices from rising but will likely slow the rate of increase. The analysis forecasts that vehicles assembled in the U.S. with substantial U.S. parts, such as the Honda Civic and Odyssey, Chevrolet Malibu, Toyota Camry Hybrid, and Ford Explorer, will see tariff burdens ranging from $2,000 to $3,000.
The study categorizes the potential impact of tariffs by vehicle class. Models like the Chrysler Pacifica, BMW X3, Ford Bronco Sport, Volkswagen Jetta, and some Jeep and Ram models are expected to incur a medium tariff impact ranging from $4,000 to $8,000. Full-size luxury SUVs and some battery electric vehicles (BEVs), such as the Mercedes G-Wagon, Land Rover and Range Rover models, and Ford’s Mustang Mach-E, fall into the high-impact category with tariffs between $10,000 to $12,000.
The tariff adjustments are a mixed bag for certain automakers like Ford. While the tariff impact on Ford’s Explorer, manufactured in Illinois, dropped from about $4,300 to $2,400, the all-electric Mustang Mach-E, assembled in Mexico, will maintain its high tariff rate of over $12,000. Variants of the Chevrolet Suburban, GMC Yukon, and Cadillac Escalade, made in Texas, are expected to see their tariff burden drop from $11,000 to just below $8,000.
“The sales surge in March confirms that Americans expect prices to go up because of tariffs, and the revised AEG estimates confirm they are right,” said Patrick L. Anderson, the study’s lead author. Trump’s new executive order prevents multiple U.S. tariffs from being stacked on the same imported product and provides carmakers partial rebates on tariffs paid for imported parts.
The adjustments have received a cautious response from the automotive industry. General Motors warned that the impact of Trump’s amended tariffs could still be “significant” and that the company was “reassessing” its guidance. While U.S. automakers like GM and Stellantis have received some relief, the overall industry remains cautious.
In conclusion, while Trump’s adjusted auto tariffs may slow the rate of car price increases, they are unlikely to stop prices from rising. Car buyers can expect continued price growth, albeit at a potentially slower pace due to the new policies.
