It is possible that the purchase of your next car is more expensive, thanks to President Donald Trump.
About 5.3 million cars were built in Canada and Mexico, 70 percent of which are intended for the United States. Those vehicles will be soon It is subject to 25 percent definitionsWhich has just been announced by the Trump administration. It is very likely that companies that pay the highest price for importing these vehicles and which they speak to the consumer – for you will be transferred to you.
Mike Wall, CEO of Automotive Analysis at the S& P Global Mobility, says you can’t see MSRPS higher instantly. But you will likely see less incentives and special deals in agents, as merchants get their peak around their car inventory lists. Less number of vehicles may be made with manufacturers weighing 25 percent payment costs on the main parts and components. Ultimately, the high cost of building and selling a car in the United States will be nominated to the consumer.
About 5.3 million cars were built in Canada and Mexico, 70 percent of which are intended for the United States.
“I cannot emphasize that enough,” said Wall. “A 25 % huge tariff in this industry.”
The tariff is a tax on goods imported from another country. The Trump administration claims to impose new definitions on Canada, Mexico and China to stop the flow of illegal drugs to the United States. Often, presidents use customs tariffs as a threat during commercial negotiations or to protect local industries from cheaper foreign products (as the Biden administration has done with electric cars from China). but like New York Times NoteTrump sees definitions as an important source of revenue for the United States, perhaps even as an alternative to income taxes.
But most economists expect the result to be higher for a wide range of consumer goods, from clothes, to shoes, to food, to cars. Trump claims that foreign companies will eat higher costs, but do not be fooled.
You only need to listen to companies that will carry these costs. Philip Daniele, CEO of Autozone, said in September, according to CNN.
Almost every car company will be affected: Ford’s F-Series and Mustangs with engines made in Canada; Mazda CX-50s from Mexico; Complete Pick App trucks from General Motors and Stellantis; Even Toyota RAV-4.
“A 25 % huge tariff in this industry.”
The S& P Global Mobility estimates that the 25 percent customs tariff on a $ 25,000 car from Canada or Mexico will be $ 6450 – most of which will be carried by the consumer.
“With the rise in this price, consumers come out,” Wall said. “They will separate, they will wait. They may go to the used market. I will tell you what, if the pricing rises in the new market, guess what? This pricing will be affected in the used market because it is something offered and asked.”
The prices of electric vehicles may also be affected, especially if the price of some components increases as a result of the definitions. CEO of RIVAN RJ Scaringe Recently The customs tariff is a greater threat to the EV industry than the potential cancellation of tax incentives under Trump. Although many EV makers make huge investments in local manufacturing thanks to the Law of inflation in the Biden administration, they are still being exposed just like companies that build combustion engines.
Most car manufacturers say they have emergency plans for definitions, but they will not say exactly what these plans are. Ford and BMW spokesman refused to comment.
The Puebla Factory in Volkswagen is the largest in Mexico and one of the largest group of Volkswagen Group, which achieved approximately 350,000 cars in 2023, including Jetta, Tiguan and Taios models, all of which are exporting to the United States. In a statement, the company said it “is still a strong and fair trade defender.”
“We are watching the situation and planning for various scenarios,” added the German auto giant. “We hope a quick solution to the definitions throughout North America.”
