Automatic tariffs announced by President Donald Trump will probably increase cars prices in thousands of dollars days after the policy enters into force, while hiking costs for repairs and insurance, some experts told ABC News.
A few hours after the release of the policy, Ferrari said that prices will increase up to 10% for some models to compensate for tariffs.
The rates of 25%, which will enter into force next week, will be applied to imported passenger vehicles, including cars, SUV, minivans, load vans and light trucks, according to a white house. statement released after Trump’s Oval comments on Wednesday.
Tariffs will also be applied to the imported automotive parts, including engines, motor train parts and electrical components.
“I’ve talked to consumers who say: ‘Well, I’m not buying a car, so it doesn’t really matter.’ Well, think again,” Jessica Caldwell, director of ideas at Edmunds, told ABC News. “All this is really crowded.”
In a statement on Wednesday, the White House promoted tariffs as a means to safeguard national security and economic strength.
“President Trump is taking measures to protect the United States automotive industry, which is vital for national security and has been undermined by excessive imports that threaten the national industrial base and the United States supply chains,” said the White House.
Tariffs will surely increase foreign manufacturing cars, experts said, since importers generally transmit a part of the tax burden on consumers in the form of additional costs.
Last year, American buyers bought approximately 16 million cars, SUVs and light trucks, half of which were imported, said the White House.
The other half of the automotive sector, composed of cars made in the United States, will also undergo significant price increases since manufacturers will face higher costs for imported parts and will face an increase in demand as buyers are looking for national alternatives, experts said.
“The question is: what will happen to all cars made here in the United States?” Christopher Conlon, professor of Economics at the University of New York who studies commerce, told ABC News.
“Competitive vehicles will be a lot, much more expensive. We will see some substitution for us models, and I would expect those prices to rise significantly,” said Conlon.
Dan IVES, Managing Director of Equity Research of the Wedbush investment firm, predicted increases of price -related price increases for US buyers between $ 5,000 and $ 10,000 per vehicle.
Additional costs could reach up to $ 20,000 per vehicle, Art Wheaton, director of Labor Studies of the Cornell Industrial and Labor Relations School, who studies the automotive industry, told ABC News in a statement.
The shock of the label for new cars will send many buyers to the market for used cars, sending higher prices for used vehicles, experts said.
“The market will be very competitive for used car buyers,” said Conlon. “I hope those prices go up.”
President Donald Trump offers comments on car rates and other issues in the Oval Office of the White House in Washington, on March 26, 2025.
Francis Chung/EPA-EFE/Shuttersock
It is also likely that car tariffs increase the price of car repairs, since car stores can transmit additional costs to customers, experts said. In turn, they add, insurance costs will probably increase to take additional expenses in case of an accident.
“If you enter an accident that requires many parts, it will probably make those costs increase,” Caldwell said.
New cars prices could increase a few days after the start of tariffs on April 3, some experts said.
Some companies may increase the prices of the inventory already in the US.
“Some sellers will increase prices in advance of rates,” said Hoenig.
Some experts did not agree, saying that price increases could take weeks or that the moment is still unknown.
“Automobile manufacturers will take time to solve everything,” Caldwell said, predicting that price increases would strengthen “quite soon.”
The automotive sector of the United States is based on an intricately intertwined supply chain with Mexico and Canada.
Mexico and Canada constitute the two main US commercial partners for finished motor vehicles and car parts, according to a data analysis of the United States International Trade Commission by the Cato Institute, a group of experts.
Automatic rates relieve the tax burden slapped to vehicles covered by a free trade agreement between the United States and Canada known as the United States-México-Canada, or USMCA agreement. For such cars, tariffs will only apply to the value of its non -American content, said the White House.
Meanwhile, the pieces of the car covered by the USMCA will remain free of rates until the Trump administration establishes a process to evaluate the value of its non -American content, the White House added.
The flexibility of tariffs for vehicles covered by the USMCA could slow down the initial price increases, said Hoenig.
