Trump’s Tariffs Are Already Raising Car Prices and Hurting Automakers
President Donald Trump’s unilaterally imposed tariffs continue to harm both domestic and global markets. Multiple automakers now expect lower profits and higher prices for consumers.
Reuters reported this week that as a result of Trump’s tariffs, Ford Motor Co. will raise prices on three of its models by as much as $2,000 apiece. Days earlier, the company said it expected the tariffs to reduce annual earnings by $1.5 billion, even after making efforts to avoid U.S. import duties.
Rivian, which makes luxury electric vehicles from a single plant in Illinois, also announced this week that it expected to deliver fewer vehicles and spend more money this year as a result of the tariffs.
Then on Thursday, The New York Times reported that Toyota “predicted a $1.3 billion hit from President Trump’s tariffs in April and May alone.”
In a March executive order, Trump slapped a tariff of 25 percent on all imported automobiles, as well as automotive parts like engines, transmissions, and electrical components. The only exception was for those covered under the U.S.–Mexico–Canada Agreement (USMCA), in which case the tariff only applied to the portion of the vehicle’s value not “attributable to parts wholly obtained, produced entirely, or substantially transformed in the United States.”
The results were completely foreseeable: At the time, Cox Automotive chief economist Jonathan Smoke told The New York Times the tariffs could add $3,000 to even the price of cars made in the United States. This week, a Ford spokesperson told Reuters, “We have not passed on the full cost of tariffs to our customers.”
As he often does, Trump says tariffs are nece
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