Let’s talk about what’s really going on with these new car tariffs. The Trump administration has added a 25 percent tax on vehicles that are built in other countries and brought into the U.S. This kind of tax is called a tariff. It makes those vehicles more expensive, and that cost could end up coming out of your pocket.
But here’s something most folks don’t know: even if a car is built in the U.S., it can still get hit with the tariff if too many of its parts come from another country.
According to a recent article in Automotive News, the tariff would apply to any vehicle made with less than 75 percent American-made parts. That’s a big deal because only about 40 percent of vehicles built in the U.S. meet that 75 percent mark. That means the majority of U.S.-built cars and trucks could still be taxed under these rules. And those extra costs will likely be passed on to buyers.
What Are Automakers Doing About It?
Car companies are already responding to these new tariffs:
Audi is holding cars at U.S. ports instead of sending them to dealers, which means less inventory and higher prices coming soon.BMW says these tariffs could cost them more than $1 billion, and they’re still deciding how much of that cost they can eat before passing it to the customer.Ford launched a special pricing plan called “From America, For America,” which gave buyers employee-style discounts on certain models built in the U.S.Volkswagen is adding an import fee to its cars and is pausing shipments from Mexico for now.General Motors is looking at moving some vehicle production back to the U.S., but that’s a big and expensive move that takes time.So What Does This Mean for You?
Let me break it down in plain English.
If these tariffs stick around, new car prices will go up, even for vehicles made in America. That’s because most cars still rely on parts from other countries—parts like transmissions, electronics, or engines.
So, the whole car doesn’t have to be imported to get hit by the tax.
Some experts think prices could rise by $5,000 or more. That includes everything from luxury SUVs to electric vehicles. And when new cars get more expensive, people start shopping for used ones, which pushes those prices up, too.
And there’s another thing to think about: if the government cuts federal jobs like some are suggesting, that’s fewer people with paychecks. And when folks aren’t working, they’re not buying cars. That slows everything down—sales, service, parts, and even factory jobs.
What Should You Do?
If you need a car now, ask the dealer where the car is made and where the parts come from. If it’s built mainly in the U.S. with U.S. parts, you may avoid the tariff price hike.
If you don’t need a car right now, waiting might be smart. Things are changing fast, and automakers might start offering deals or even shift how they build cars to avoid tariffs.
Also, keep an eye out for special discounts—some companies will offer promotions to help keep customers buying during this confusing time.
Want to know if the car you’re looking at will be affected?
Check out this full list from Car and Driver that shows how the new tariffs may impact every vehicle sold in the U.S.:
Car and Driver: How 25% Tariffs on All Imported Cars Will Affect Every Model
Final Word from The AutoNsider:
Here’s the bottom line—these tariffs might be aimed at other countries, but they could hit your bank account right here at home. Whether you’re buying now or later, doing your homework is more important than ever.
Stick with me. I’ll explain everything weekly and help you stay ahead of the curve.