Tariffs Might Increase Car Prices by $6,000, Affecting Half of the Top 50 Best-Selling Vehicles in America | Carscoops

      A large number of the most sold cars in the US originate from Canada and Mexico.

      Tariffs could lead to a substantial increase in car prices, especially for more affordable models.

      Approximately 40% of vehicles priced under $40,000 may encounter notable price increases due to these tariffs.

      Additionally, vehicle components sourced from Canada and Mexico are likely to experience considerable price hikes as a result of the tariffs.

      President Donald Trump has temporarily paused his proposed 25% tariffs on Canada and Mexico, granting both nations a 30-day extension while discussions continue. However, if these tariffs are eventually implemented and remain in place, consumers in the United States may experience considerable price shock. This situation wouldn't only affect individual car buyers; the entire North American auto industry could be thrown into turmoil.

      The automotive market spanning the U.S., Canada, and Mexico is an intertwined system, developed over 30 years and based on free trade. Tariffs of this magnitude wouldn’t merely raise dealership prices but would also disrupt supply chains, put pressure on manufacturers, and create broader economic repercussions.

      Previously, estimates indicated that tariffs on the US’s two closest trading partners could add up to $3,000 to the cost of an average vehicle, as automakers would pass these expenses on to consumers. However, recent research suggests that the actual increase might be significantly greater. In fact, tariffs on cars assembled in Canada or Mexico could raise prices by as much as $5,855 per vehicle.

      Budget-conscious buyers could bear the brunt of this situation.

      One of the top-selling cars in America, the Honda Civic, is produced in Canada.

      According to Cox Auto, tariffs would directly affect half of the 50 best-selling vehicles in the U.S., which together make up about 60% of the total market. The study also indicates that cars priced under $40,000 would be most significantly impacted, with 40% of them seeing major price increases. Even more concerning, half of the top 20 models priced under $30,000 would be directly affected.

      This implies that those least able to handle these price increases, such as working-class individuals seeking affordable transportation, would experience the greatest financial burden.

      Widespread Impact

      Moreover, it’s not just vehicles manufactured in Canada or Mexico and exported to the U.S. that will be affected by tariffs. High duties will also negatively impact all automotive parts moved between the three nations. Consequently, all car manufacturers and suppliers will be directly impacted by the tariffs in some capacity. Unless these brands decide to absorb these additional costs (which they are unlikely to do), consumers will have to cover the increased expenses.