Since the campaign trail for the 2024 Presidential election, tariffs have been a hot topic. At the time, they were a large part of the economic plan for the then Republican nominee Donald Trump. Since he won the election and was sworn into office for the second time, many have been awaiting the day in which tariffs are in fact put into place and begin to affect imported goods. Now that we are nearly 2 months into Trump’s second presidency, tariffs are becoming an even more real part of our reality. President Trump announced that tariffs will be added to imported goods from Canada and Mexico. Canada has fired back and said they will place tariffs on American made goods. Now, we have to prepare for economic adjustments all around, including in the automotive industry.
Last week, President Trump said there will be a one month delay for auto related tariffs.
Why a one month delay has been added with specifications is unknown. But, nonetheless, people are weighing in on what to do in that one month. Once the delay is over, there will be a 25% tariff on Canadian and Mexican goods. This means that any automakers who rely on parts and pieces from either country will be hit with a massive increase in manufacturing costs. This will trickle down and lead to consumers facing high costs at the dealership.
Experts recommend buying a new car sooner rather than later if you need/want to.
While it is unclear when exactly consumers would face the higher prices, many expect it to happen sometime in 2025. Expert analysts predict car prices will have around $2,000 to $12,200, added to the current prices. The actual amount will vary depending on model and maker. Nonetheless, all vehicles are expected to see a steep price hike later this year.
With the tariffs, even automakers who are unaffected by the tariffs are expected to raise their prices. As the price range of the market on average goes up, those who do not have higher manufacturing costs will raise their prices as well, as they can still offer competitive pricing when everything else is so high. This means that there will be a point in which all new cars, no matter what, will be far higher than they are now. That is why experts advise people to purchase new cars now to avoid high prices if they can.
There are possibilities that further delays will come for the tariffs.
However, experts still suggest that consumers prepare now. Economists are hopeful that the tariffs, whenever they are implemented, are not long lasting. But, since we are being told they are coming indefinitely, it is important to be ready for higher prices for cars and many other goods such as food and clothing.