President Trump is back on his trade war wave — and this time, it’s rolling straight through the auto industry. With a fresh round of 25% tariffs on cars and auto parts set to take effect on April 3, people from the auto industry, from C-suites to dealership floors, are bracing for the impact.
The administration says it’s about protecting national security and strengthening the U.S. manufacturing base. But if you’re thinking about buying a car this year, or if your job has anything to do with auto production, here’s the truth: You may be paying more, waiting longer, and dealing with fewer options. And that’s just the beginning.
Why The White House Is Saying This Is Necessary
According to an official statement from the White House, these tariffs on cars are aimed at keeping America safe. The administration is emphasizing that too many imports are “undermining” the “domestic industrial base” and weakening the U.S. supply chain. The idea is to hit foreign-made cars and parts with a 25% tax, and magically, more companies will build in America.
Sounds good on paper. But here’s the reality: Most “American” cars are not made entirely in America. In fact, a CNN report notes that more than half of the parts in U.S.-built cars are sourced from other countries, such as Mexico and Canada. So whether your car is imported or not, it’s still getting hit.
Tariffs On Cars = Higher Prices, No Matter What You Drive
Industry experts aren’t sugarcoating it. Prices are going up — fast. Edmunds.com projects an additional cost of anywhere between $3,500 and $12,000 per car once the tariffs take effect, according to CNN. And it’s not just the upfront price tag. Automakers could pull back on incentives, such as low-interest financing, which would drive the effective cost up by as much as $6,000–$7,000 per vehicle.
“It’s too soon to tell how much,” said Ivan Drury, director of insights at Edmunds.com. “But it’ll be a couple of thousands of dollars, if not more.”
Peter Nagle, an auto economist with S&P Global Mobility, said it straight: “There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion.” So whether you’re eyeing a luxury SUV or a modest sedan, expect sticker shock.
Who’s Most At Risk In The Industry?
Not all automakers are built the same. According to the New York Times, Tesla — whose CEO Elon Musk remains in Trump’s inner circle — might dodge the worst of it since most of its cars are built in California and Texas. But even Tesla sources around 25% of its components from abroad, which means it’s not entirely safe. Plus, international backlash for Musk’s politics could hit the company hard.
General Motors is deep in the mix, however. Nearly 40% of GM’s sales in the U.S. come from vehicles built in Mexico. Automaker Stellantis (Chrysler, Dodge, Jeep, Ram) also leans heavily on cross-border factories. That dependency puts it at serious risk, particularly if these tariffs on cars persist in the long term.
Even Ford, which builds most of its cars domestically, is sweating. It relies on engines and electric vehicle parts from Canada and Mexico. And companies like Toyota, Volkswagen, and Hyundai? Despite their U.S. factories, they still import tons of inventory that is about to face significant tax increases.
For Everyday Folks? The Cost Is Real
Let’s talk about what this means at the ground level. Car prices are about to jump. Inventory will likely shrink. And who feels that the most? Working families are already navigating inflation, tight budgets, and rising costs across the board.
According to a previous AFROTECH™ report, tariffs could easily tack on $3,000 or more to a new car — pushing many buyers out of the market entirely. That kind of increase hits low-income households and Black and brown communities especially hard, where every extra dollar counts. Speaking on the effects of Trump’s earlier tariffs on imports, Alicia Brown, a mother of two in Chicago, IL, told The Washington Informer, “It’s already expensive to eat healthy where I live. …If they start charging more for fresh produce, people will have to choose between food and rent.”
Retaliation Is Already Brewing
Don’t forget the U.S. has neighbors. Canada, America’s top trading partner, isn’t sitting quietly. In response to Trump’s widespread tariffs, it launched a $21 billion retaliation package targeting essential American exports like orange juice, peanut butter, and appliances. And while a more significant $87 billion response has been temporarily paused, the message is clear — this isn’t just a disagreement; it’s a trade war.
Ontario, Canada, slapped a 25% surcharge on electricity exports to states like Michigan and New York, driving up regional energy costs — a direct hit to auto-producing regions. British Columbia, Canada, banned liquor imports from Republican-led states that supported Trump, turning political alignment into economic consequence.
Canadian businesses are also pivoting away from U.S. suppliers, shifting to partners in Europe and Asia — a long-term shift that could weaken American influence in global markets.
This latest round of tariffs on cars doesn’t just reopen old wounds — it deepens an already-brewing trade conflict with one of our closest allies. While the administration frames it as economic protection, the fallout shows just how quickly protectionism can backfire.
Tariffs On Cars: Safety Net Or Power Play?
Economic policies like tariffs on cars don’t operate in isolation. Each move sends shockwaves across industries, with some sectors adapting while others face collapse. As the AFROTECH™ article states, “Every tax, every regulation, every tariff — sends ripples through the system. Some people surf the waves. Others get drowned by them.” That ripple effect is hazardous in the auto industry, where global supply chains and domestic livelihoods are deeply intertwined.
And if you look to history — such as the infamous Smoot-Hawley Tariff Act of 1930 — then you know that using tariffs to solve complex economic issues often backfires. That policy contributed to the collapse of global trade and exacerbated the Great Depression.
Today, the country is witnessing something eerily similar unfold again. While some sectors may experience a short-term boost, the broader economy — mainly working-class Americans — will bear the weight.
