How Trump’s auto tariffs could reshape the car market and push entry-level buyers out

By Sirisha Dinavahi

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    4/3/25 (LAPost.com) — As President Donald Trump implements a 25% tariff on imported cars and auto parts, consumers and automakers are bracing for potential price increases and market shifts. Industry analysts warn these tariffs could add thousands of dollars to vehicle prices, potentially pricing out entry-level buyers and reshaping the automotive landscape.

Effective April 2, the tariffs have led to a surge in car purchases as consumers attempt to buy vehicles before prices rise. Rhett Ricart, owner of Ricart Automotive Group in Ohio, reported increased demand and numerous inquiries about the tariffs’ impact on various brands.

“One out of four of the people who called in were talking about tariffs—’ Does this car have a tariff on it? A Hyundai? A Kia? A Nissan?’ That’s what they wanted to know about,” Ricart said.

According to J.D. Power, this rush contributed to a 13% increase in new vehicle sales in March.

Automakers are expressing concern over the potential long-term effects of the tariffs. “So far, what we’re seeing is a lot of cost and a lot of chaos,” Jim Farley, CEO of Ford Motor Co., said. He emphasized a 25% tariff across the borders of Mexico and Canada could significantly disrupt the U.S. auto industry.

The tariffs are expected to have a pronounced impact on vehicle affordability, particularly for budget-conscious consumers. Kelley Blue Book estimates the tariffs could raise the U.S. price of the average new car – already approaching $49,000 – by $3,000 or more. The price of some full-size pickup trucks could increase by $10,000.

“Most anticipate the price of some vehicle models will increase by as much as 25%, and the negative impact on vehicle price and vehicle availability will be felt almost immediately,” John Bozzella, president of the Alliance for Automotive Innovation, said.

The American International Automobile Dealers Association highlighted the direct impact on consumers: “Tariffs could directly contribute to thousands of extra dollars on sticker prices.”

Automakers have emphasized the complexity of the North American supply chain, with some auto parts crossing borders multiple times before final assembly. Bozzella stated, “You just can’t relocate automotive production and the supply chain overnight. That’s the challenge and the dilemma: auto tariffs in North America could end up increasing costs on consumers before jobs come back to the country.”

Industry experts are voicing concerns about the broader economic implications of these tariffs. Goldman Sachs has increased the probability of a recession to 35% within the next year, citing the administration’s acceptance of short-term economic weakness. Other institutions – including S&P Global and J.P. Morgan – have also downgraded their GDP growth forecasts due to the tariffs. The auto industry, in particular, is expected to face severe challenges, with new-car prices potentially rising by thousands of dollars.

In response to these developments, consumers are advised to consider purchasing vehicles sooner rather than later to avoid potential price hikes. “If you’re already in the market to buy a car, go ahead and speed that process up just a little bit,” said Brian Moody, of Autotrader.

However, experts caution against rushed decisions and recommend thorough research to ensure buyers make informed choices.

“What happens when there’s pressure, people sometimes start to look for amazing deals,” Moody said. “So, just like always, if it seems too good to be true, it probably is.”

While purchasing a vehicle before prices potentially increase may seem prudent, experts recommend thorough research and caution against hasty decisions.

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Rebekah Ludman
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