President Donald Trump’s 25% tariff on foreign-made vehicles and parts stands to raise prices on vehicles by thousands of dollars, according to industry economists and other analysts.
Sticker prices are already near record highs — just shy of $50,000 on average, Cox Automotive. A record number of buyers are delinquent on their auto loan payments, according to Fitch Ratings. Tariffs threaten to raise prices by around $6,000 per vehicle on average, according to Cox Automotive.
“Prices are going to rise and manufacturers will decide which vehicles they want to build going forward,” said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions. “So that’s going to lower the number of vehicles available to the customer, which will raise prices again.”
Some of the models likely to be the hardest hit are pretty strong sellers, including the Honda CRV, Chevrolet Trax and Subaru Forester, according to Cox Automotive. About 44% of the new cars sold in the U.S. each year are made either in Canada, Mexico, or somewhere in Europe or Asia, according to Cox Automotive.
Analysts and economists say a plan to reshore automotive manufacturing would cost billions of dollars in investment and take years.
CNBC breaks down which vehicles are likely to be most affected by tariffs and how much prices could rise.
Watch the video to learn more.
