New cars in the United States are likely to get significantly more expensive after President Trump introduced a new 25% tariff on foreign-made vehicles.
According to research firm Cox Automotive, these auto tariffs could add around $6,000 to the price of cars manufactured in Mexico or Canada—two of the largest vehicle exporters to the U.S. The Toyota Tacoma pickup, both gas and electric versions of the Chevrolet Equinox, and several Ram pickup models are expected to be impacted.. Ram, owned by Stellantis, is the same company behind Dodge, Chrysler, and Fiat vehicles.
Reliance on Imports
The U.S. also imports a significant number of cars from Japan and South Korea, along with smaller shipments from European countries like Germany, Italy, Sweden, and Britain.
Jonathan Smoke, chief economist at Cox Automotive, expects higher car prices to discourage buyers and force automakers to cut back on production. He predicts that U.S. factories could produce 20,000 fewer cars each week—a drop of about 30% from normal levels.
“By mid-April, we expect nearly all vehicle production in North America to face disruptions,” Jonathan Smoke said during a Wednesday conference call with clients and reporters. “The bottom line: lower production, tighter supply, and higher prices are just around the corner.”
The auto tariffs won’t just affect car buyers—they could also impact the millions of Americans working in the auto industry.The Bureau of Labor Statistics reports that around one million people in the U.S. work in auto and parts manufacturing, while another two million work at dealerships selling cars and parts.If higher prices lead to fewer sales, automakers could cut production, causing factory workers to face furloughs, and dealerships might reduce staff.
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