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.
As of 10:40:27 AM EDT. Market Open.
GM F STLA
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.
