President Donald Trump has promised tariffs on foreign carmakers, but the effects of those tariffs could mean higher costs for consumers on a variety of items, including repairs.
Trump has ordered a variety of reciprocal tariffs beginning April 2, including 25% tariffs “on all cars that are not made in the United States,” as part of his latest push. Here is how those tariffs are likely to affect automobile prices and other costs attached with owning a car.
What are the tariffs?
The tariffs Trump announced last week will affect foreign-made cars and certain foreign-made auto parts by invoking a 25% tariff upon their import. The impacts of the auto tariffs will be in addition to other reciprocal tariffs, White House officials said last week after the announcement.
Will the tariffs affect cars from U.S. brands?
Cars from U.S.-based automakers, including the Big Three Detroit automakers — Ford, Stellantis, and General Motors — will not be immune from the tariffs, due to where the cars themselves are assembled and where the parts come from.
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Ford assembles roughly 80% of its vehicles in the U.S., while Stellantis assembles 73%-75% of its vehicles domestically, and General Motors makes 45% of its vehicles in the U.S., according to CBS News.
The remaining cars not manufactured in the U.S. would be susceptible to the 25% tariff, but even those vehicles made domestically would not necessarily be free from the tariffs.
The tariffs Trump has outlined also take aim at some car parts imported into the U.S., which includes those used in vehicles assembled domestically. Some foreign car parts, engines and engine parts, transmissions and powertrain parts, and electrical components, will also see 25% tariffs in the forthcoming action by the president.
Tesla, which assembles all of its cars in the U.S., will not be unscathed, according to Tesla CEO Elon Musk, who posted on X that the impact of tariffs on the company would be “still significant.”
How will cars from foreign brands be affected?
The main target of these tariffs is foreign car brands, as the vast majority of cars from foreign companies are made outside of the U.S.
Several foreign-made car brands, including Nissan, Mercedes-Benz, BMW, and Honda, assemble some of their cars for the U.S. market domestically and would be immune from the 25% tariffs on those vehicles.
While most foreign auto brands manufacture their vehicles abroad, several of the models they do make in the U.S. are heavily reliant on foreign auto parts, according to Department of Transportation data.
Lower-cost vehicles could also be negatively affected by tariffs, according to Reuters, as many foreign automakers manufacture several popular entry-level cars and do so outside of the U.S.
Will this affect the cost of car repairs?
While tariffs will have an immediate effect on car owners when they purchase new vehicles, they could also become a rising cost for consumers who are not in the market for new vehicles.
Repairs to cars that require expensive new parts, including engines and transmissions, could cost significantly more as many of those parts come from outside the U.S. Some analysts also worry that increasing the scope of the car parts affected by tariffs would further increase repair costs for consumers.
What has the reaction been?
The impact on the auto industry is expected to be immediate, but some analysts have said the limited tariffs on auto parts have helped lessen the effect most U.S.-made cars will see on their costs.
“The announcement that all imported vehicles will see 25% tariffs will have a broader impact on the auto market. However, since the tariffs do not at least immediately apply to parts, it may not be as disruptive to U.S. vehicle production as we had feared,” Cox Automotive Chief Economist Jonathan Smoke said in a report from the firm.
The American Automotive Policy Council, which represents the three major domestic automakers, said they are “committed to President Trump’s vision of increasing automotive production and jobs in the U.S.” but also warn that “it is critical that tariffs are implemented in a way that avoids raising prices for consumers.”
The foreign automakers are less enthusiastic about the tariffs. Autos Drive America, which represents various foreign automakers in the U.S., warned the tariffs “will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the U.S.”
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Trump has labeled Wednesday, when the tariffs are due to take effect, as “liberation day,” and he has said that the tariffs could be permanent as a way of getting consumers to purchase U.S.-made vehicles.
The Trump administration’s tariffs have concerned some analysts, but have an ally in autoworkers unions, with United Auto Workers President Shawn Fain praising the efforts in the past week.