As Tariff Talk Heats Up, Get Ready for More Expensive Cars and Trucks | Global News Avenue

Deduct, shopper.

The next step in U.S. trade policy, experts say prices may climb. According to economists, there is less chance of cutting transactions or worrying about cleaning up stocks, and the vehicles on display today would be more valuable if the U.S. starts imposing tariffs.

Americans are looking for affordable cars, and dealers’ current inventory may be the cheapest for some time, making it extremely popular. Buyers can expect to back off the promotion. Meanwhile, dealers may have to pay more to replace the vehicle for sale.

Economists say that while the fast-moving trade environment is difficult to calculate the exact impact, the phase is set to rise in automobile prices and keep rising for a while.

“No one is sure what this means for the market,” said Charlie Chesbrough, senior economist at Cox Automotive. “But I think we can expect prices to start rising.”

Monthly payments are already a barrier

According to Cox, about 16 million new cars were sold in the United States last year. Cox said the average price of the new car is about $48,000, up about 1% from the same period last year.

According to Chesburg, those prices are already far away, he said that over the past five years, the average monthly payments for new cars have increased by 26% to $780, while the average monthly bill for used cars has risen by 30% to about $560.

“This keeps many from taking on these monthly payments,” Chesbrough said in a webinar last week. “This is the biggest headwind facing the vehicle market right now.” Asset management company Apollo said the average car age on the road has reached 14 years due to rising prices, as Americans have been sticking with longer vehicles.

Trump administration’s trade policy is expected to raise prices. Tariff 25% In aluminum and steel Plans start tomorrow, if the material comes from Canada, President Trump discusses up to 50%. He has Delayed implementation Currently, the 25% tariff on other commodities from Mexico and Canada will come into effect on April 2.

According to the International Trade Administration, the United States imported more than 8 million cars and light trucks in 2024, more than half of which came from Mexico or Canada. The United States produced about 1.75 million cars in 2023, and the most recent year data is available from the International Motor Vehicle Manufacturers Organization.

Cars completed in states may rely on Canadian and Mexican parts, and until recently, trade agreements also avoided tariffs and fees. If the U.S. imposes tariffs on goods, the price of a car pooling in North America could increase by $3,500 to $12,200, according to research and consulting firm Anderson Ecancaper Group.

For automakers, the solution may be limited

Chesburg said dealers and manufacturers have been accumulating inventory to raise tariffs. But even if domestic manufacturers come from U.S. companies, it is nearly impossible to avoid additional costs.

An example: Ford (fCEO James Farley said at a meeting last month that much of its steel received international sources from the U.S., meaning Ford will not be immune to price increases – whether it is driven by the tariffs themselves or their possibilities.

Bank of America analysts said in a report earlier this month that some parliaments could be brought back to the U.S., but the transition could take three years. But in most cases, manufacturing auto parts at home will be more expensive than importing them, the notes say.

U.S. auto prices are expected to rise about 6% after manufacturers and suppliers have adjusted for the budget, which is considered from retaliatory tariffs in Canada, Mexico and China, according to estimates from Yale University’s Budget Laboratory.

“Let’s be truly honest,” Farley said at the meeting, according to Ayers History’s transcript. “Tariffs across the Mexican-Canadian border will dig holes for the U.S. industry we’ve never seen before.”