U.S. tariffs on imported cars are set to go into effect this week.
President Donald Trump announced the 25% tariff on all foreign-made cars and auto parts last week. It’s a move he believes will foster more domestic manufacturing over time.
But for people looking to buy a car now or who need repairs, time is not on their side. Some carmakers will be more affected than others, but the tariffs are expected to raise prices for brands traditionally known for their affordability, like Toyota.
Chloe Chiado currently drives an older Hyundai SUV, but says she was finally hoping to purchase something new when we saw her at a Toyota lot on Monday. Now, that plan has changed.
“I will not be getting a new car. I’m going to run this one into basically the dirt trying to keep it until the last possible second because buying a car right now does now look probable for me,” she said.
She said the tariffs on foreign cars and parts limit what brands she can afford.
“It’s a big expense regardless, but it is... concerning thinking if something goes wrong with my car, can I afford to make the repair if the part is foreign and there is that large tariff on it,” Chiado questioned.
Consumer advocate Clark Howard helped us identify which cars will be impacted the most by the new tariffs.
“Depending on the brand, it could be really ugly and the reason the brand is so significant is that some brands have very high US content, others very low,” Howard said.
For example, a Honda has an extremely high amount of US content in most of their vehicles, while Toyota doesn’t — which means Toyota will cost more.
“Now, $20,000 car may end up being like $22,000, and where you’re really going to see the huge increases are going to be on foreign luxury vehicles,” he said.
Luxury brands imported from Europe or Asia, like Mercedes, Volvos, Land Rovers and BMWs could increase in price by $10-20,000. Though, BMW says it plans to absorb the cost of the tariffs for now.
Another potential impact of the tariffs could be on American jobs. Experts believe this may lead to layoffs in auto plans because demand will go down, though President Trump argues that over a longer period, it could spur more American manufacturing.
“If people my age can’t afford the bare minimum, then it’s really hard to understand for us,” Chiado said.
It’s currently not clear how long the tariffs will be in place.
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