The automotive industry is once again bracing for potential disruption. The specter of Donald Trump’s proposed tariffs on imported vehicles and components looms large, creating uncertainty for both automakers and consumers. The potential for significant price hikes has many prospective car buyers concerned about the future cost of their next vehicle. This article examines the possible impacts of these tariffs and highlights some of the car and truck models most likely to see price increases.
This latest round of tariff talk comes amidst an already volatile market. Automakers and industry analysts are struggling to predict the day-to-day impacts of potential tariffs, making long-term planning difficult. Consumers are left in the dark, wondering how their purchasing decisions will be affected. The tariffs, if implemented, wouldn’t just target finished vehicles; they would also affect imported components. Even vehicles assembled in the U.S. rely on parts sourced from Canada and Mexico, making them vulnerable to increased costs.
Economists and policy experts are analyzing the potential consequences. According to the Tax Foundation, tariffs are often passed on to consumers rather than absorbed by manufacturers. Research by economists Pablo Fajgelbaum, Pinelopi Goldberg, Patrick Kennedy, and Amit Khandelwal, focusing on tariffs imposed in 2018 and 2019, showed that U.S. consumers and businesses bore the brunt of the cost, leading to significant net losses.
If history is any indicator, automakers are likely to pass the increased costs of tariffs directly to consumers. This means that cars and trucks could become considerably more expensive. While projected price increases vary, analysts estimate potential increases ranging from $4,000 to $13,000 per vehicle, depending on the model and segment.
Patrick Anderson, CEO of Anderson Economic Group, discussed these implications on CBS MoneyWatch. He stated, “Our analysis shows the proposed tariffs would have a very big effect on North American assembled cars by multiple automakers.” He further elaborated, “These are cost increases that cannot be hidden from the consumer. Substantial portions, or perhaps all of it, will be passed along to consumers, or manufacturers will stop producing them.”
So, what specific car and truck models are likely to be affected if the Trump tariffs take effect? Here’s a look at the projected impacts, according to the AEG study:
-
Battery-powered electric crossover vehicles: +$12,200
-
Full-size SUV: +$9,000
-
Pickup truck: +$8,000
-
Small car: +$6,200
Let’s delve into some popular models and their potential price increases:
- Ford Bronco Sport (Mexico): +$6,200
Even before potential tariffs, the Bronco Sport, like many vehicles, has seen its price inflated due to production issues. The additional cost would make this popular compact SUV even less affordable.
- Ford Mustang Mach-E (Mexico): +$12,200
The Mach-E has quickly become a popular electric vehicle, and the potential for a $12,200 price increase could significantly dampen its appeal. This added cost could also hurt the growing EV market.
- Chevrolet Silverado 1500 (Mexico): +$9,000
Pickup trucks are a cornerstone of the American automotive market. A $9,000 price increase on a model like the Silverado 1500 could discourage potential buyers.
- Honda CR-V Hybrid (Canada): +$6,200
The CR-V Hybrid is a practical and popular choice for families. The $6,200 increase could make this car far less affordable.
- Mazda CX-30 (Mexico): +$6,200
Like the Honda CR-V Hybrid, the Mazda CX-30 is a popular, practical option for many middle-class buyers. The $6,200 price hike could deter shoppers.
- Ram 2500 (Mexico): +$9,000
The Ram 2500 is a truck designed for heavy-duty work. An additional $9,000, without any additional features, would be a significant burden for buyers in agricultural or rural communities.
- Toyota Tacoma (Mexico): +$9,000
The Toyota Tacoma is well-regarded for its practicality and reliability, making it a popular choice. The $9,000 price increase could make the Tacoma significantly more expensive.
- Honda Civic Sedan (Canada): +$6,200
The Civic is famed its reliability and affordability, and a $6,200 increase would be a hit against these values.
- Ford Maverick (Mexico): +$9,000
The Maverick presented a value truck option and has earned critical acclaim as a vehicle of choice. The tariffs will remove the ability of the US to acquire affordable vehicles.
- GMC Sierra (Mexico): +$9,000
These price figures are what separate trim levels. Many pickup trucks will lose the benefits of price decreases in base models.
The potential for increased prices on these and other models highlights the potential impact of tariffs on the automotive market. Consumers should carefully consider these potential cost increases when making car-buying decisions.
