Your next car could quickly become much more expensive if Trump makes good on his tariff threat next week
CNN
Tariffs on Canadian and Mexican imports are looming again. And that could quickly send car prices soaring, even for those assembled in the United States.
Tariffs on Canadian and Mexican imports are looming again. And that could quickly send car prices soaring, even for those assembled in the United States. That’s because the auto industry has spent decades operating as if all of North America is a single market, moving cars parts and vehicles freely across borders of the three countries. As a result, there isn’t such thing as an all-American car built with parts made solely in the United States. President Donald Trump said this week that tariffs of 25% on the value of all imports from Mexico and imports other than energy products from Canada will take effect Tuesday. The last time Trump announced these tariffs, he quickly reversed course and delayed them from taking effect for a month. But unless there’s another delay or the threat of tariffs is completely dropped, the auto industry — and car prices — are set to experience a seismic shock. “There’s probably not a vehicle on the market today that wouldn’t be affected in some form or fashion by tariffs,” Peter Nagle, automotive economist for S&P Global Mobility, told CNN. “I would think prices would start to change in the one-to-two weeks after the tariffs go into effect.” The US government tracks what percentage of each car’s parts is made “domestically.” But under current trade law, both Canadian-made parts and US-made parts are counted as effectively coming from one country. Even with the broader definition of “American made,” none exceed 75%. There are only two vehicles that are considered to be 75% “American-made” by the US government — the Tesla Model 3 and the Honda Ridgeline, a pickup assembled at a Honda plant in Lincoln, Alabama. And once again, that 75% figure includes parts from Canada.
