Manufacturing and employment cuts are also expected
Car prices could rise by thousands of dollars because of tariffs on imports from Mexico and Canada that went into effect this week.
The price for a battery-electric crossover vehicle could rise as much as $12,000, a full-size SUV by $9,040 and a pickup truck by $7,960, according to a report from consultancy Anderson Economic Group, which reviewed unnamed models fromfrom GM, Ford, Chrysler, Toyota, Honda, Kia, BMW, Audi and Tesla assembled in North America.
The increases are because of tariffs, which are essentially taxes paid by exporters,on imported cars, car parts, steel and aluminum that President Trump slapped on Canada and Mexico, which resulted in retaliatory tariffs from the countries.
That kind of cost increase will lead directly and I expect almost immediately to a decline in sales of the models that have the biggest trade impacts, said Patrick Anderson, chief executive officer of Anderson Economic Group, in an interview with Bloomberg.
Tariffs are also expected to result in production and employment cuts, Anderson Economic Group said.
Tariffs on the scale that President Trump has threatened would have a sharp negative effect on auto sales, the consultancy said.
U.S. auto sales could drop by half a million vehicles because of the tariffs even under a less severe situation, according to Dan Hearsch, leader of the Americas automotive practice at consultant AlixPartners, Bloomberg reports.
Some of those vehicles that cant be produced in the US just probably wont be made for a while, Hearsch said in an interview with Bloomberg.
And car insurance is another areagetting hit by tariffs.
Car insurance rates are expected to rise 60% faster, resulting in an average cost of $2,502 a year for full-coverage car insurance after tariffs by the end of 2025, instead of $2,435, which represents an 8% climb versus 5%, ConsumerAffairsreported in February.
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Posted: 2025-03-04 22:37:24
