For those considering a car purchase before the end of the year, President Trump’s tariffs could mean cutting a much bigger check for your new ride. In fact, consumers looking to buy a new vehicle will get hit the hardest with the estimated $30 billion cost, which looks to push car prices up about $2,000 per person.
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Before you head to your local dealership, here’s a look at how these tariffs could impact the car market.
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How Will Trump’s Tariffs Affect Cars in 2025?
A tariff, which is a form of tax on imported goods, is designed to protect American companies from foreign competition by making similar imported goods more expensive. Payment of the U.S.-imposed tariff falls on the person or company that imports the product, which can be passed along to the consumer in some cases.
According to the International Trade Administration (ITA), Mexico and China are two of the world’s largest vehicle manufacturers. In fact, Consumer Reports noted that there are even several American and European brands that sell Mexican and Chinese-built vehicles in the U.S.
Many automakers build smaller, lower-cost vehicles in Mexico or other countries due to slim profit margins and lower labor costs. Because of this, the only way to get around the costs of these tariffs would be for automakers to build cars in the U.S., which comes with its own cost implications. Some economists predict that Trump’s Tariffs are expected to drive up auto costs anywhere between $4,000 to $12,500 by the end of the year, depending on what type of car you buy and where it comes from.
Here are the main takeaways regarding Trump’s recent tariff implementation — and the ways it could impact costs.
Early in his presidency, Trump implemented 10% tariffs on goods coming in from China, with an additional 10% tariff on Chinese imports coming a few weeks later.
The current tariffs on imported cars to the U.S. are 25% on many vehicles and certain auto parts. This tariff, imposed by the Trump administration, is in addition to the existing 2.5% base tariff
Trump’s imposed 25% tariffs on steel and aluminum took hold recently.
As tariffs have now been implemented for the most part, the cost for vehicles and auto parts will undoubtedly increase, which is unfortunate, as prior to this, the auto market had shown signs of stabilizing.
The timing of the tariffs goes against the 0.3% decrease in new vehicle prices since last year (according to the recent consumer price index data). However, used cars and trucks went up 0.8% since that time; meanwhile, both new and used are still lower than the current 2.8% core inflation rate in general, but that is estimated to go up.
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15 Brands That Will Be Most Impacted by Trump’s Tariffs
Now that tariffs are in full effect, while not every car model may see price increases right away, many analysts and auto experts predict these car brands could get more expensive as a direct result of Trump’s tariffs. This is based on where certain vehicles are manufactured and where their parts are imported from.
BMW
Buick
Dodge
Ford
Honda
Jeep
Kia
Mazda
Nissan
Ram
Polestar
Subaru
Toyota
Volkswagen
Volvo
Josephine Nesbit contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: Trump’s Tariffs: 15 Car Brands That Will See Price Hikes
