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Miami Herald
04-05-2025
- Automotive
- Miami Herald
New Study Forecasts How Softened Tariffs Will Affect Car Prices
A new study has predicted that President Trump's adjusted tariffs, which he amended on April 29, won't stop car prices from rising but will likely slow the rate of increase. The analysis, researched by Michigan-based Anderson Economic Group (AEG), forecasts that the least impacted vehicles will see a tariff burden of $2,000+. At the same time, the most affected models will incur tariffs exceeding $12,000. Vehicles assembled in the U.S. with substantial U.S. parts, like the Honda Civic and Odyssey, Chevrolet Malibu, Toyota Camry Hybrid, and Ford Explorer, are likely to see tariff burdens ranging from $2,000 to $3,000. AEG estimated that a large portion of the auto market would incur a medium tariff impact ranging from $4,000 to $8,000. This category consisted of models like the Chrysler Pacifica, BMW X3, Ford Bronco Sport, Volkswagen Jetta, and some Jeep and Ram models. Models in the $10,000 to $12,000 high-impact category mostly involve full-size luxury SUVs and some battery electric vehicles (BEVs), like the Mercedes G-Wagon, Land Rover and Range Rover models, and Ford's Mustang Mach-E. AEG noted that Trump's tariff amendments reduce levy costs for some vehicles assembled in the U.S. but don't eliminate costs from any model the group studied. As for cars assembled in other countries, even those with substantial U.S. parts didn't experience significant tariff price reductions. For example, Ford's Explorer, manufactured in Illinois, had its tariff impact drop from about $4,300 to $2,400. Others, like the all-electric Mustang Mach-E, which is assembled in Mexico, will maintain its high tariff rate of over $12,000. Variants of the Chevrolet Suburban, GMC Yukon, and Cadillac Escalade are made in Texas, and their tariff burden is projected to drop from $11,000 to just below $8,000. "The sales surge in March confirms that Americans expect prices to go up because of tariffs, and the revised AEG estimates confirm they are right," said Patrick L. Anderson, the study's lead author. Trump's new executive order, signed on April 29, prevents multiple U.S. tariffs from being stacked on the same imported product for companies making vehicles in the U.S. while also giving carmakers partial rebates on tariffs paid for imported parts at 3.75% during the first year and 2.5% the second year before being phased out. The offset is only available for cars produced after April 3, though. AEG isn't the only group speaking out about the significant impact of Trump's tariffs, even with recent adjustments. "It's akin to having a car accident and saying, 'Oh good, it's not totaled, but it's still $20,000 worth of damage,'" Dan Ives, managing director of autos at Wedbush Securities, said in an interview with the Detroit Free Press. General Motors (GM) warned on Tuesday that the impact of Trump's amended tariffs could still be "significant" and that the company was "reassessing" its guidance while waiting on "greater clarity," according to NBC. Autoblog posed the question this week of whether Trump's adjusted auto tariffs would make a significant enough impact, and answers are starting to emerge. While US automakers like GM and Stellantis have received a break on the president's sweeping measures and expressed their appreciation, GM's warning on Tuesday reflects that much of the industry is remaining cautious and playing things by ear. In the meantime, car buyers can still expect prices to rise soon, but the rate at which these cost increases will occur might slow down due to Trump's new policies. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Yahoo
03-04-2025
- Automotive
- Yahoo
Trump makes good on auto tariff threat with 25% levy on foreign-made cars
President Trump made good on his tariff threat for foreign-made autos, slapping 25% tariffs across the board on foreign-made cars. At an event at the White House Rose Garden, Trump called his tariff plan a 'declaration of economic independence" and said the administration would impose reciprocal tariffs on countries around the world as well. Though Trump didn't mention auto parts in his speech, it is understood the tariffs would be imposed on parts as well, per the tariff codes listed in the Federal Register. The Big Three automakers (Ford, GM, and Stellantis) were lobbying the White House to keep low-value parts and materials free from tariffs, as those would be difficult to replace. Nevertheless, it seems Trump will offer no concessions to the auto industry with his tariffs. Shares of GM (GM), Ford (F), and Stellantis (STLA) were all lower in after-hours trading. Trump said if other countries brought their tariffs down, this could impact the levies assessed by the US government, starting on April 3. The tariffs on auto parts would be imposed no later than May 3. Ahead of the tariff plan reveal, the Anderson Economic Group (AEG) issued a new report on Wednesday detailing the effect of these tariffs on auto prices. 'Tariffs expected to cost additional $2,500 to $5,000 for the lowest-cost American cars, and up to $20,000 for some imported models,' the research firm said, calculating that this would end up costing the US consumer $30 billion in its first full year. Cars like the Honda Civic and Ford Explorer would have a 'low impact' tariff effect of $2,500 to $5,000 per car, and vehicles like Jeeps, Ram trucks, and Ford's Bronco Sport would have a 'medium impact' of $5,000 to $8,000. Most severe would be 'high impact' autos, like full-size SUVs, foreign luxury models, and EVs, which could see costs jump by $10,000 to $12,000. Those models include the Chevrolet Suburban, BMW X5, and Ford Mach-e, AEG said. 'If you are in the market for a new car and you find one you like, my advice is to buy it right away. If you have a used car you rely upon, my advice is to make sure it is well maintained as you are likely to use it for a while longer than you had earlier planned," said Patrick L. Anderson, AEG's principal and CEO, in a statement. While most auto dealers have 50 to 100 days of typical supply, prices may start rising even ahead of the supplies being exhausted to cover the cost of tariffs. Volkswagen, for instance, is reportedly splitting up its April vehicle allocations to dealers in two parts, with unaffected vehicles coming in on April 7-8 and autos likely to be impacted by tariffs coming in on April 22-23. Rail shipments from Mexico, where the German automaker builds its high-volume Tiguan SUV, would be suspended at this time. VW also said its giant plant in Chattanooga, Tenn., would see production impacted, most likely due to a potential tariff cost to auto parts coming across the border. This story is developing. Check back for more updates. Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram. Sign in to access your portfolio
Yahoo
02-04-2025
- Automotive
- Yahoo
Trump makes good on auto tariff threat with 25% levy on foreign-made cars
President Trump made good on his tariff threat for foreign-made autos, slapping 25% tariffs across the board on foreign-made automobiles. At an event from the White House Rose Garden, Trump called his tariff plan a 'declaration of economic independence" and said the administration would impose reciprocal tariffs on countries around the world as well. Though Trump didn't mention auto parts in his speech it is understood the tariffs would be imposed on parts as well, per the tariff codes listed in the Federal Register. Big Three automakers were lobbying the White House to keep low-value parts and materials free from tariffs, as those would be difficult to replace. Nevertheless it seems Trump will offer no concessions to the auto industry with his tariffs. Shares of GM, Ford and Stellantis were all lower in after-hours trading. Trump said if other countries brought their tariffs down, this could impact the levies assessed by the US government, starting on April 3rd. The tariffs on auto parts would be imposted no later than May 3rd. Ahead of the tariff plan reveal, the Anderson Economic Group (AEG) issued a new report on Wednesday detailing the effect of these tariffs on auto prices. 'Tariffs expected to cost additional $2,500 to $5,000 for the lowest-cost American cars, and up to $20,000 for some imported models,' the research firm said, and would end up costing the US consumer $30 billion in its first full year. Cars like the Honda Civic and Ford Explorer would have a 'low impact' tariff effect of $2,500 to $5,000 per car, and vehicles like the Jeeps, Ram trucks, and Ford's Bronco Sport would have a 'medium impact' of $5,000 to $8,000. Most severe would be 'high impact' autos like full-size SUVs, foreign luxury models, and EVs that could see costs jump by $10,000 to $12,000. Those models include The Chevrolet Suburban, BMW X5, and Ford Mach-e, AEG said. 'If you are in the market for a new car and you find one you like, my advice is to buy it right away. If you have a used car you rely upon, my advice is to make sure it is well maintained as you are likely to use it for a while longer than you had earlier planned," said Patrick L. Anderson, AEG's principal and CEO in a statement. While most auto dealers have 50 to 100 days of typical supply, prices may start rising even ahead of the supplies being exhausted to cover the cost of tariffs. Volkswagen, for instance, is reportedly splitting up its April vehicle allocations to dealers in two parts, with unaffected vehicles coming in on April 7-8, with autos likely to be impacted by tariffs coming in on April 22-23. Rail shipments from Mexico, where the German automaker builds its high volume Tiguan SUV, would be suspended at this time. VW also said its giant plant in Chattanooga, Tenn., would see production impacted, most likely due to a potential tariff cost to auto parts coming across the border. This story is developing, check back for more updates. Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram. Sign in to access your portfolio
