Trump plans to impose tariffs on products from Canada and Mexico starting tomorrow and as any economist worth their salt will tell you, tariffs are taxes on consumers.
The study from automotive consultant Anderson Economic Group that predicted the cost increases also concluded that consumers will be left paying the price. Despite Trump’s claims, the other countries will not be bearing the financial burden.
The tariffs are expected to spike the prices of vehicles and vehicle parts manufactured in those countries. If he proceeds with his absurdly high suggested tariff rate of 25%, automotive groups anticipate that building crossover utility vehicles will cost $4,000 more per.
Worse yet, a large SUV that requires “significant” parts manufactured in Mexico will see an increase of $9,000. Pickup trucks will cost $8,000 more. An electric vehicle will go up by $12,000.
The analysis predicts that these cost increases will lead to a rapid decrease in sales, which in turn could cause ripple effects throughout the broader economy.
“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, CEO of Anderson Economic Group.
Best selling vehicles like the Chevrolet Silverado and Ford Bronco will likely be affected. Other vehicle models may vanish from the market entirely as manufacturers are forced to stop producing them.
“Some of those vehicles that can’t be produced in the US just probably won’t be made for a while,” said Dan Hearsch, head of the Americas automotive practice at AlixPartner.
“You’ll see some model and trim types just disappear,” said Anderson.
Worst of all, American car sales are already in a slump. The tariffs have yet to take effect and vehicle sticker prices are already up 20% this year compared to 2020.
As with everything Donald Trump does, this is will end in disaster for average Americans.
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