In the aerial view, the Chevrolet car and truck will be on display at Novato Chevrolet on January 28, 2025 in Novato, California.
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According to data from Investment Bank Benchmark, if President Donald Trump’s proposed tariffs come into effect, Americans who shop for cars may need to diverge into more than thousands more.
Analyst Cody Acley estimated that the average sticker price would rise by about $5,790 based on the current 25% tax impact on cars and components in Mexico and Canada. This will result in an average new car costing more than $54,500 or nearly 12% higher than 2024.
“We believe the automotive sector is most exposed to the risk of increased tariffs,” Acree wrote in a note to his client. and a huge number of our company participating in supporting this major consumer industry. ”
Trump slapped 25% tariffs in Canada and Mexico in early February, shaking the market in a short time, but later reached a temporary agreement with Prime Minister Justin Trudeau and President Claudia Sheinbaum. I have suspended my duties for a month.
Nowadays, consumers and investors wonder what form of tariffs will take or if they will be enforced at all. The benchmark calculated what a 25% taxation meant for the average American purchasing power on popular amount purchases.
The estimated costs for benchmark cars are based on more than 22% of completed cars sold in the US from Mexico and Canada last year. In addition, the company said about 40% of the parts used in the vehicle come to the US from North American partners.
This amounted to more than $200 billion in exports to the United States last year. Specifically, Acree discovered that Mexico supplied the US with $95 billion of finished vehicles in 2024, in addition to $68 billion in parts.
During this week’s industry event, Ford Motor CEO Jim Farley said Trump’s proposed tariffs in Canada and Mexico combined with 25% fees for steel and aluminum imports caused headaches.
“President Trump has spoken a lot about strengthening the US automotive industry, bringing more production here and more innovation in the US. If his administration can achieve that, That would be… one of the most signature achievements,” Farley said. Wolfe Research Investment Conference. “So far, what we’re seeing is a lot of costs and a lot of confusion.”
– CNBC’s Michael Wayland contributed to this report.
