Why Trump’s Auto Tariffs Are Set to Raise Car Prices

President Donald Trump is betting that a 25% tariff on imports of vehicles and automotive parts will bring more manufacturing to US shores.

But realizing that ambition rests on a major overhaul of the globally integrated supply chains the auto industry has spent decades fine-tuning. Cars aren’t single-origin products like coffee. They’re made up of tens of thousands of components — from the transmission to the alternators to individual springs — that are sourced from all over the world.

Shifting production to the US of more, let alone all, of those parts would be an expensive transition for carmakers. American consumers would likely feel the pain too, as tariffs are widely expected to push up vehicle prices by thousands of dollars.

That prospect could spur another tariff climbdown from Trump, who said in mid-April that he’s “looking at something to help car companies” to give them more time to switch their supply chains and manufacturing to the US. He didn’t specify what form that relief could take — be it a blanket pause, carve-outs or a lowering of the duties — or how long it would remain in place.

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